Luxon Promises Lower Student Loan Repayments to Keep Graduates in NZ

Prime Minister Christopher Luxon has announced that National plans to lower student loan repayment rates for graduates who stay in New Zealand. The proposed change would cut compulsory repayments from 12c on the dollar to 10c, while those moving overseas would face higher interest rates and harsher penalties for defaulting.

National's finance spokeswoman Nicola Willis said that the cut in repayments would keep talented young graduates in New Zealand and penalise those who left and refused to pay their loan back. The annual interest rate on overseas-based balances would increase 1 percentage point to 5.6%, with added penalties for sustained default.

Labour's tertiary spokesman Shanan Halbert responded by saying that while any loan relief was welcome, National should be judged on its whole record, including raising the repayment rate from 10% to 12% in 2012. Auckland University Vice-Chancellor Nic Smith described the changes as 'a small step in the right direction' but emphasized the need for more action to retain young and talented individuals.

Today is also the deadline for the Government to formally decide whether to delay next year's 12c fuel tax hike, and an equivalent increase in road user charges. National's finance spokeswoman Nicola Willis last week said that the Government would not raise the tax in January, but the decision needed to be formalised.