Most young people 'following their noses' to find work, not dodging student loans, economist says
New Zealand economists suggest that youth emigration is driven by a challenging local job market rather than a desire to avoid student loan repayments. The government plans to tighten repayment rules for overseas borrowers while lowering rates for those remaining in the country.
Why it matters
The debate highlights the tension between government fiscal policy regarding student debt and the economic realities facing young graduates.
Young people who left New Zealand in recent times might have been forced to do so by the employment market, economists say, rather than deliberately choosing to take their skills offshore.
National announced at the weekend it would cut the repayment rate for New Zealand-based student loan borrowers from 12 percent of their income to 10 percent from April next year.
The repayments become compulsory once someone earns more than $24,128 a year.
But overseas borrowers will face stiffer penalties.
Finance Minister Nicola Willis said it was not fair that graduates could take their skills offshore after receiving a heavily subsidised tertiary education, and not repay their loans.
Interest is applied to student loans when someone is out of the country for more than six months.
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