Student debt predicted to pass $20b mark

Student-loan debt will grow by an average of $875 million a year to a total of more than $20 billion by 2022, new projections show.

The latest official figures, obtained by student leaders under the Official Information Act, show current student-loan debt at $10.2b.

Debt was expected to increase to $12.7b in 2012, $15.1b in 2015, $17.4b in 2018 and $20.7b in 2022.

The figures come as the Government signals more conditions will be placed on debt.

"The predicted doubling of student debt in just over a decade represents a growing mortgage on future generations of New Zealanders," Union of Students' Associations co-president Jordan King said.

The draft tertiary education strategy, released last week, said the Government may have to re-examine its assistance to some people in tertiary education.

"Given the significant investment the Government makes in students both through tuition subsidies and student support, students are expected to take responsibility for their own performance," the strategy said.

Tertiary Education Minister Anne Tolley said yesterday that the economic circumstances did not allow consideration of widening student allowances.

No decisions had yet been made on restricting access to loans and allowances, she said.

Canterbury University vice-chancellor Rod Carr said it was a good idea to look again at who was allocated student debt.

"With scarce resources, you make them available to those who can make the most of the opportunity," he said.

The Tertiary Education Commission was considering allocating payments directly to polytechnics and universities on the basis that students completed degrees, he said.

This was dangerous, however, because institutions could graduate poor students just to get money. He said there was also a danger of elitism – universities might not admit those who would struggle to get a degree.

"We have to be a little bit careful about how we implement what, on the face of it, appears to be a jolly good idea," Carr said.

- © Fairfax NZ News