Why interest free loans must go

If ever there was a need for an explanation of why interest free student loans need to axed it is the entitlement essay written by Richard Meadow on Stuff.

Monday was a day of new beginnings. We celebrated the good lord’s rise from the grave with a three-day chocolate and hot-cross-bun binge.

In less joyous news, a new tax year began, and with it came a series of changes to the student loan scheme.

Monday marked the closure of a 10 per cent bonus for voluntary repayments made to your loan balance.
The minimum repayment was also raised from 10 cents to 12c in every dollar earned above the $19,000 threshold.

With these changes now in place, it’s time to reassess the smartest method for casting off your student debt millstone.

So what should you do?

Nothing at all. 

That’s it. You can breathe easy. If you’re a borrower living in New Zealand, the best course of action now is to kick back and let the taxman drag your loan back from your paycheque, cent by measly cent.

The last incentive for making an early repayment has officially gone down the gurgler.

From here on in, it makes sense to repay your loan as slowly as possible.

I’ll give then an incentive….20% interest. This sort of entitlement mentality really makes me sick. The scuzz-bag even tells people how to game the system.

The early repayment bonus was scrapped because people were exploiting it.

“We weren’t getting the benefits of advanced payments because of the way it was working,” says Revenue Minister and United Future leader Peter Dunne.

“What, in fact, we saw happening was that people were reclaiming the repayment bonus in the last years of their repayment.”

There are plenty of boffins-in-training in the finance department at University of Auckland who had it all figured out.

One mathematics major – who asked to remain anonymous- has been borrowing as much as possible throughout his study.

“I’m in my fifth year, so that’s five years of compound interest, which is not to be laughed at,” he says.

Last week he managed to scrape together almost $20,000 to take advantage of the voluntary repayment bonus before it closed.

“I worked a lot over summer. I borrowed as much money as I could – from family, from wherever – because you can’t beat a 10 per cent interest rate.”

Now he’s back to borrowing more and building up the interest again. From here on in, he’ll repay the loan as slowly as he can while inflation eats away the balance and he earns money on his investments.

These fuckwits…and that is the only word to explain them aren;t gaming the system, they are gaming the taxpayer…and this taxpayer has had enough.

Bizarrely, after telling the student loan bludgers how to game the system he then decides to talk about ethics!

FFS is this guy a potential Labour MP with a moral compass as wonky as his?

You know what is wrong with the welfare system, including student loans…we give the bludgers nice names…like ‘clients’ or ‘beneficiaries’ instead of calling them what they are….bludgers…or some other suitable name. There’s another incentive right there…perhaps we should change all that, issue id cards that are red so people know they are tax takers not tax payers. Issue gold cards to net tax payers not bludger pensioners.

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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.