Stephen Joyce says the long-term benefits of tertiary study far outweighed the short-term cost of having a student loan. Photo / Andrew Warner
Stephen Joyce says the long-term benefits of tertiary study far outweighed the short-term cost of having a student loan. Photo / Andrew Warner
Tertiary Education Minister Steven Joyce has defended the student loans scheme after a sociology professor claimed billions of dollars of debt was causing several knock-on financial and social effects.
Yesterday, NZME News Service reported more than $11 billion is owed to the student loans scheme.
University of Auckland sociology professorAlan France said the debt delayed adulthood, increased social inequality, and made "financial risks" of previous norms, such as having children.
"Most people now go into low-skilled, low-paid jobs which are insecure when they leave university, so they wind up fighting large student debts on low incomes from jobs which don't have a great deal of long-term future prospects," he said.
Graduates from low socio-economic backgrounds had it particularly tough. However, regardless of background, buying houses and having families were increasingly difficult for young people, according to Professor France.
However, Mr Joyce said the long-term benefits of tertiary study far outweighed the short-term cost of having a student loan.
"The median earnings of young people who complete a bachelor's degree are 46 per cent above the national median earnings five years after finishing study," he said.
"Meanwhile on average, students who stay in New Zealand repay their loan within 6 years."
Mr Joyce said there was also no statistical evidence having a student loan had any impact on childbearing trends.
"It's important to note that New Zealand has one of the most generous student support systems in the world. Taxpayers directly pay around 70 per cent of the cost of tuition; and provide interest-free student loans for the balance of the tuition fees, and significant student living costs."
