No interest on student loans - Govt
The Productivity Commission has stuck to its guns in recommending interest be added to new student loans, but the Government is sticking to its own – saying it will not happen.
The commission has released its final report on the future of tertiary education, reiterating the position outlined in the draft that interest should be reintroduced to student loans. It also suggested loans be extended to students for tertiary courses that are New Zealand Qualification Authority approved.
However, the New Models of Tertiary Education report, dropped the idea of giving school-leavers a $45,000 grant for their tertiary education, which had been raised in the draft.
The commission was also recommending University Entrance be abolished, and that schools provide better career advice for school leavers.
Minister for Tertiary Education, Skills and Employment, Paul Goldsmith said, despite the recommendation to bring back interest on loans, the Government was committed to keeping the scheme interest-free for borrowers living in New Zealand.
It would keep an open mind on the commission’s other recommendations.
Early last year the commission was asked to look into what was happening within the tertiary sector by the then Tertiary Education, Skills, and Employment Minister Steven Joyce, and then Minister of Finance, Bill English.
Bringing interest back on student loans would give the Government more money to play with, which could be targeted elsewhere in the sector, including scholarships, commission chair Murray Sherwin said.
The commission had also floated the idea of a $45,000 school leavers fund, to be given to 16-yearolds.
In the end that was too hard, Sherwin said, but had served to highlight how much money there was ‘‘floating around in the system’’.
In terms of career advice, while there may be some good careers advisors sitting in schools doing fantastic work, it was by chance, rather than design, Sherwin said.
Acting inquiry director Kevin Moar said provision was patchy in schools, but feedback suggested reform was widely supported.
The Ministry of Education had indicated work in the area was already underway.
Universities New Zealand executive director Chris Whelan said the commission had lost sight of the big picture, and in taking a very strong student focus, had not considered the large amount of research that went on at a tertiary level.
The organisation agreed with many of the things the commission had identified as things holding institutions back, like too many regulations, and funding restrictions.
He disagreed with a suggestion that more providers should exist in the market.
University Entrance gave high school students a very clear goal to aim for, as getting it showed students they were ready to succeed at university, he said.