Opposition MPs are critical of the Government's planned changes to student loans and allowances, saying they will force graduates to leave the country.
From next year, the Government will raise the minimum loan repayment rate from 10 to 12 cents in the dollar, stop allowances after four years' study and freeze the parental income threshold for allowances for four years.
Labour MP Grant Robertson says the increase of 20% in the minimum repayment rate will prove too much for some graduates.
"What this is saying to graduates is that you will have ... a further 2% taken out of your pay and people will look across the Tasman and wonder, 'why aren't I going there?'."
New Zealand First MP Tracey Martin also says people will be forced overseas in search of higher wages, while Green MP Holly Walker believes the Government is sending a message that only the wealthy are welcome to do postgraduate study.
The Medical Students Association says restricting student allowances will make it harder for people from low-income families to become doctors.
Association president Michael Chen-Xu says debt is the biggest driver of graduates leaving New Zealand and the country already has a huge shortage of doctors.
He says further restricting student allowances to four years could deter people from studying medicine, which takes at least six years, and will make it harder for students from poorer backgrounds to become doctors.
However Tertiary Education Minster Steven Joyce says people who study longer than four years have greater earning potential and therefore can afford to borrow more to pay for their study.
Mr Joyce said the rise in the minimum repayment rate will result in better quality education for future generations.
He told Morning Report that New Zealand has the most generous student support system in the world, but there is a risk of underspending on education itself if the changes are not put in place.
Prime Minister John Key says the changes will save the Government up to $70 million per year.
Mr Key says more than 500,000 people have student loans, and the Government is writing off 45 cents in every dollar it is lending students. "We think we can get the rate back to only writing off 40 cents in the dollar."
Mr Key said reducing the number of years student allowances are available will affect those in higher level post-graduate courses.
"Their income levels are likely to be considerably higher when they have a PhD or Masters and so in principle we think that's about the right move."
