STUDENT LOANS

That this House accepts the principle that young people from all levels of society should be encouraged to go into higher education; is therefore concerned to find that the interest payable on student loans has now doubled from 2.4 per cent. to 4.8 per cent.; considers that such a high level of interest was never envisaged when the student loan was tied to the Retail Price Index to bring it down; and has never been charged at such a high rate since then because the tie brought rates payable as low as 1.3 per cent. in 2002-03 and was regularly between 2.0 to 2.6 per cent.; notes that today's high rate of 4.8 per cent. will constitute a serious deterrent on taking on loans and will produce an arrears burden too heavy to bear by young people leaving college and university to start a life in today's debt burdened society; and therefore suggests that the interest charged on student loans should be either abolished as the New Zealand government has done or pegged at a maximum of one per cent. to give a fairer deal to students and maximise recruitment to higher education.