Labour has criticised changes to student loan repayment thresholds announced in yesterday’s Budget, saying that they equate to a tax hike for graduates.
Inflation adjustments to student loan repayment threshold have been suspended for a further two years until April 2017. The threshold is currently set at just over $19,000.
In the Budget announcement, Tertiary Education Minister Steven Joyce justified the “marginal” increase to student borrowers’ total repayments by the reduction in repayment times and future lending costs for the Crown.
But Labour’s Tertiary Education spokesperson Maryan Street says not adjusting the repayment threshold for inflation equates to a “sneaky tax surprise” for students.
“By refusing to lift thresholds with inflation, they are biting further and further into real earnings as living costs rise. ... In each and every one of National’s first five budgets, they cut student support. Now they are going after students even as they leave education to make their way in the world.”
She said the repayment threshold was adjusted for inflation under Labour, which gave graduates a stronger incentive for students to find work, while recognising that low earners “need a little more in their pockets to make ends meet”.
Last year, the National Government raised repayment levels from 10 to 12 per cent of earnings, following a raft of controversial changes to student support schemes in the 2012 Budget which included axing allowances for post-graduate students.
The Wireless’ Elle Hunt reported on the Budget announcement and from the lock-up.
