Encouraging students to pay off student loans faster is good policy, says BusinessNZ.
BusinessNZ Chief Executive Phil O’Reilly says the fiscal burden of a very generous student loan scheme weighs heavily on the economy, and the Government is doing the right thing in limiting it.
“Prioritising parts of the tertiary system that lead directly to better economic outcomes – for example on outcomes in the science, technology, engineering and maths areas – can bring better value than overspending on student allowances and interest-free loans.
“Focusing on the actual content and value of tertiary education should be a priority in education spending.
“Restraining student allowances to four years of study and requiring loan repayments at 12 per cent of income are a reasonable response to the unsustainable debt being created by the scheme.
“This should not be the end of the process, and Government should continue to look for ways to minimise the amount of poor quality public spending in the tertiary area,” Mr O’Reilly said.