Editorial: Ending interest-free loans a risky move

Bringing back interest on student loans wouldn't quite be political suicide for National, but it would put a massive dent in their popularity.

The issue is a bugbear of the Key Government, which saw interest-free loans as nothing more than a Labour bribe leading up to the 2005 election.

That was a tight election and the promise was a crucial part of keeping Helen Clark in power for another three years.

Most governments wouldn't even raise the issue because it would be a vote killer, but because National and Mr Key are riding high poll-wise and are unlikely to lose next year's election, the PM has nothing to lose by floating the idea.

Despite that popularity it would be highly unlikely that interest-bearing loans will be reintroduced between now and election day late next year.

Mr Key this week described the interest-free scheme as a "disaster".

And it's hard to argue with that on one level considering the loan book has ballooned out to $11 billion.

In saying that, doing a policy U-turn isn't just a matter of alienating 18 and 19-year-old voters. It will also affect voters well into their 30s and 40s, who are still repaying their debt.

The Government could spin it as some kind of crackdown on wasted taxpayer money, but it is already planning to put in place rules that tighten the requirements around how people get student loans.

They are also looking at making it harder for people to take on tertiary study in the first place.

Those two measures alone will put the onus of accountability back on serious students who are committed to learning, rather than waste millions of dollars on people who lack the motivation and dedication needed to complete a tertiary course.

The student loan scheme was never intended to be a money-making scheme, or even a break-even scheme.

And it shouldn't attempt to be either of those things.

In their purest forms, student loans are an investment in people.

The majority of students tick all the boxes and are legitimate learners. Their hard work, in some cases over several years, should not be given an extra burden because of a small percentage who rort the system and take it for granted.

The air crash at Feilding this week was a tragedy felt the country over. While investigators sift through the information and the wreckage of the Cessna that Jess Neeson and Patricia Smallman died in, two families prepare to bury their loved ones.

Today, on page 1, Jess' family bravely speak out about her and how proud they were of her, all she had achieved and the lives she touched.

- © Fairfax NZ News