Someone has to pay for free money

Interest free student loans are interest free to the student but they come at considerable cost to taxpayers.

In spite of that the suggestion that students pay a $50 administration fee has already been met with howls of anguish from the usual suspects who think we don’t do enough.


“If we take into account student allowances and the student loans we lend to students to pay for fees and living costs, we spend a total of 42% of our total tertiary budget on student support,” says Tertiary Education Minister Steven Joyce.

In comparison, Australia spends about 31% of its tertiary budget that way and the OECD average is 19%.

Mr Joyce says a big reason is the way we handle our student loans. 

“Taxpayers are currently writing off about 47 cents in every dollar that is advanced on a student loan.  We remain committed to interest-free student loans but we are looking at a number of things at the margin that will promote equity and fairness between students and taxpayers.“They won’t change the world but they will give us more funds to do more in the tertiary sector.  Final decisions will be detailed in the Budget later this month.”

Student leaders and others who complain about the government not helping students enough can’t realise that we’re spending more than twice the OECD average on student support.

Most students will be taxpayers, many already are. The more they get as students the greater the burden they’re faced with as taxpayers.

All of us would be better served if  tertiary funding was rebalanced to provide more for improving the quality of education rather than the quantity of student support.

Requiring students who have loans to make a token payment towards the cost of them would be a good start.

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