Proposed student loan threshold changes harsh
Labour welcomes Revenue Minister Peter Dunne’s plans to simplify student loan repayments, but believes the proposed changes to thresholds would be harsh and punitive, says the party’s Tertiary Education Spokesperson Maryan Street.
“Mr Dunne today released a consultation document on the proposed changes and I congratulate him on his willingness to consult and his plans for simpler on-line facilities for student loan repayments.
“Anything that improves the repayment process and access to information online is to be welcomed,” Maryan Street said.
“However the proposals to change the repayment system could result in existing students having to repay larger amounts than they do now, which could in turn force them to take out larger student loans.
“Under the current system, students only have to make repayments once they have earned over $19,084 a year,” Maryan Street said.
“Under the proposed changes, students would have to begin making repayments weekly, fortnightly or monthly, depending on when they get paid. The proposal would require them to make repayments once they had earned over $367 a week.
“The problem with this is that many students would earn more than this each week during the holidays, but less than the $19,084 over a year. This means some of the money they were saving through holiday jobs for the student term would have to be used to repay their loans instead – and would probably force them to increase their loans.
“This would be a harsh and punitive step. One option would be for the Government to consider ringfencing holiday work in some way so that students don’t face increased financial burdens. This is not the time to increase pressure on students,” Maryan Street says.
