Green Party students spokeswoman Holly Walker made the suggestion of a progressive repayment rate after Tertiary Education Minister Steven Joyce last week announced a raft of changes to student loan and allowance schemes before the May 24 Budget, which included raising the repayment rate to 12%.
Ms Walker said having a progressive repayment rate was a "better way" to change the rates "without putting the squeeze on young families".
"Those on lower incomes would pay less on their student loan debt than the current rate of 10c in the dollar, while those on higher incomes would pay more.
This would achieve faster repayment rates without placing an unnecessary burden on low-income graduates and young families," she said.
NZUSA President Pete Hodkinson said he supported making the repayment rate progressive.
"The logic of the repayment scheme is that students should pay for education because they receive a private benefit, but the reality of the current system is that they are required to make repayments on their loan before that private benefit is realised," Mr Hodkinson said.
The main issue with the system was that repayments, which start when a salary reached $19,084, began at "too low an amount", he said.
Labour MP for Dunedin North David Clarke said the idea was "worth looking into".
Labour had not adopted the policy and "at this stage we have just said these changes are a crazy idea", he said.
"[The changes] will affect all graduates and make it more attractive to go overseas to pay down the debt faster."
The "devil would be in the detail" as to whether a progressive system would be a suitable alternative, he said.
Dunedin-based National Party list MP Michael Woodhouse said introducing a progressive scheme where some people paid over 12c in the dollar would drive people offshore.
He also defended the changes, saying New Zealand would still have a very generous student loan and student allowance system.
"We have still have ... one of the most generous student loans and student allowance schemes in the world," he said.
