Savings plan to cut student debt

By AINSLEY THOMSON

An Auckland businessman who wants to remain anonymous is partly bankrolling research into a savings scheme aimed at cutting the growing mountain of student debt.

Under the scheme, parents will be able to put money aside for their children's tertiary education. The private savings plan will be available to all New Zealanders.

The money would be paid into accounts which families will not be able to touch until their children enrol for tertiary study.

The scheme, which will probably be called Able, will also involve charitable organisations, community groups, employers, friends and the Government.

PricewaterhouseCoopers, AMP, KPMG Legal, Synergy International and The Empower Group are also among the financial backers.

Similar schemes operate in the UK, Sweden and the Netherlands.

New Zealand's student debt has reached $5 billion, says the University Students Association, and it has been estimated that by 2015 it will have skyrocketed to $15.5 billion.

Professional director Diana Crossan, who heads the group behind the concept, said the group hoped that most people would not need to take a loan.

A working group, made up of businesspeople and public servants, is researching the concept and will report to the Government.

Education Minister Trevor Mallard said he had been briefed about the proposal, but until it reached the Government it was inappropriate for him to comment.

Ms Crossan said the philosophy was that families would be the key contributors, but other people such as friends would be able to contribute. The proposal was still being developed and would not be finished until the end of next month, so exact details were not available.

Ms Crossan said the difference between the proposal and regular saving schemes was that other people could contribute to it.

A start date has not been set, but she hoped it would be next year.

The working group hoped the Government would support the proposal publicly and also provide financial help.