Think tanks wants interest back on student loans
It's been over 10 years since student loans were made interest-free.
Since the introduction of the scheme by Labour in 2005, the Government has written off $6 billion.
When interest was accrued, half of borrowers paid their loans back in seven years.
Under today's interest-free scheme it's only marginally better, taking half of borrowers 6.7 years.
The New Zealand Initiative doesn't see the merit in interest-free student loans; its report suggests we restore the interest component.
It claims interest-free student loans have been ill-targeted and are costly to the taxpayer.
Head of research Dr Eric Crampton spoke to Paul Henry this morning about why he wants to reinstate interest-free loans.