Plug pulled on voluntary loan repayments

The Government will pull the plug on the student loan voluntary repayment scheme, saving $43.5 million.

The Government will make savings in student support rebalancing its $4.3 billion investment in tertiary education by investing more in tuition, and less in student support.

Minister for Tertiary Education, Skills and Employment Steven Joyce said total savings over four years would total $276.3 million.

He said the cuts would free up money to reinvest in improving the quality of tertiary education and the Government's fiscal position.

The Government has increased the student loan repayment rate from 10 per cent to 12 per cent, making savings of $184.2 million over four years.

It will halt the student loan voluntary repayment scheme, saving $43.5 million over four years.

The student allowance parental income threshold will be held at its current level for four years saving $12.7 million over four years.

Another $33 million will be saved by capping student allowance eligibility to four years of study.

Mr Joyce said the Government will continue its commitment to interest-free student loans.

The Government will cut $5.4 million in funding for adult and community education in universities but will fund some of these programmes directly through community providers.

As already flagged, postgraduate students will no longer be eligible for student allowances.

The Government has reduced the write-off from 47 cents in each dollar of student loans to 45 cents.

It will reduce it further to 41 cents - close to its target of 40 cents.

"From 1 April 2013, graduate and ex-students will have to pay off their student loans faster so the Government can invest more in the next generation of students. This involves increasing the repayment rate from 10 cents to 12 cents for each dollar of income above $19,084 a year.''

- Kate Shuttleworth of APNZ

 

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