Cullen releases student loan costings

[Imported from Whale Oil Beef Hooked on Blogger]

Surprise, surprise, The Treasury’s costing of Labour’s interest free student loan policy predicted it would increase government debt.

It also said the total cost would be far higher than figures later released.

They further say that, under the first set of costings, voluntary repayments would cease — “under this scheme there is an incentive to repay debt as slowly as possible”.

The first set of figures predict uptake of student loans would increase to 95 per cent for full time students by 2008.

It predicted an increase of debt of 0.19 per cent of GDP. The total debt would rise to 4.97 per cent by 2019-2020.

I will post the dollar figures when I have them.

Aaron Bhatnagar’s comments and figures
David Farrar’s comments

To quote Jordan: “Breathtaking Bribery”


  • Treasury paper says that they “may be understating the true total cost”.
  • Annual operating cost rises to $390m by third year, and to $500m after six years, and by 2019 will be $924m.
  • Impact on gross debt is a rise of $2.4 billion by third year, rising to $5.1 billion after six years, and rising to over $10 billion after only 11 years.
  • Overall student debt INCREASES under Labour’s policy. So much for Helen Clark kicking the ‘debt monster’ to death. Student debt blows out to $19.8 billion by 2020 verses $14.2 billion under the current student loan scheme.

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