A total of 540 student loans worth a record $17.7m written off due to bankruptcy in one year

A total of 540 student loans worth a record $17.7m written off due to bankruptcy in one year

Forget the Greek bailout. We have a bailout of our own to contend with.

New Zealand taxpayers have taken a record hit over the past year paying for people defaulting on their student loans due to bankruptcy.

A total of 540 student loans, worth $17.7 million, were written off due to bankruptcy in the year to June 28.

Inland Revenue Department (IRD) figures show the value of these loans jumped from $15 million in 2013/14, $9 million in 2012/13 and just $2.8 million in 1999/2000.

The closest this figure has come to where it is now, was when it reached $16 million in 2007/8 – the time of the Global Financial Crisis as National came into government.

The average amount of student debt defaulted on due to bankruptcy over the past year was $32,778, while the median amount was $19,596, indicating there were quite a few sizeable loans in the mix.

While the value of loans written off has increased, the number of people defaulting on their loans has gone down from 685 in 2013/14.

The IRD’s explanation

The IRD puts the growth in value down to the fact more student loans are being taken out. The total value of outstanding student debt at the end of May was $14.8 billion; compared to $14.2 billion at around the same time last year, $9.6 billion in 2008 and $715 million in 2000.

The IRD says the amount of debt written off due to bankruptcy has also increased because “there is increased focus and awareness about the need for people to repay their student loans”.

In recent years it has cracked down on borrowers, by increasing the repayment rate, and reducing the maximum length of repayment holidays borrowers can take when they travel overseas, from three years to one year.  

It’s also working with the Australian government to enter an information sharing agreement that will make it easier for the IRD to follow up on people living across the Tasman who have loan repayment obligations.

'Out of sight, out of mind' attitude among NZ expats

The director of Tax Debt Management, Imran Kamal, is particularly concerned about what he believes is a growing number of borrowers going overseas, racking up interest on their loans and losing control of their finances.

Borrowers have to pay interest on their loans if they leave the country for more than six months.

 “When most borrowers are finally in a position to start making payments on their loans, they can be so inflated that they can’t comprehend the repayment obligations or the total amount of debt facing them in comparison to the amount of their original loans”, he says.

The IRD says of those who defaulted on their loans due to bankruptcy over the past year, 390 live in New Zealand, 62 in Australia, 18 in Asia, 18 in other locations, and 52 in “unknown” places.

The IRD says, “The ‘unknown’ category is mainly New Zealand addresses but the borrowers are recorded as being overseas-based. Be aware that there are New Zealand borrowers with overseas addresses and vice versa.”

Kamal maintains the rigidity of the loan repayment system, which doesn’t take borrowers’ financial positions or individual cases into consideration, exacerbates the problem.

He points out, “The IRD will only alter a repayment obligation for a maximum of one year, and interest and penalties continue to accumulate in this time”.

Otherwise, he admits some people see “simply” declaring bankruptcy as an easy answer to wiping their debt, especially if they have no intention of returning to New Zealand in the foreseeable future.

Kamal says while the impact of declaring bankruptcy in New Zealand affects your credit rating, ability to be self-employed and to travel overseas, these restrictions don’t apply when you’re living outside of New Zealand.

“As the ex-pats are no longer based in New Zealand, there is no real impact on their lives in their new countries”, he says.

“There is also less of a stigma around declaring bankruptcy amongst Generation Y, due to the changing global financial climate and changing demographic of students, availability of higher education and ability to travel.”

Call for IRD to be more flexible

Kamal believes people have a moral and social obligation to pay their student debt, however if they are in serious hardship there should be provisions in place to ease the pressure.

He says one of his clients recently declared bankruptcy, as they were sick with no chance of recovery, and the IRD would only give them a year off making repayments.

“With this kind of stringency, IRD will unfortunately find itself with many more bankrupts on its hands and less in the coffers”, he says.

“I would like to see more flexibility around repayment options, discounts or partial write-offs of penalties and interest when lump sum amounts are offered.

“It is one of the few areas of tax administration where there is little consideration given to the ability of the debtor to pay.”

IRD: Bankruptcy a last resort

The IRD says, “We endeavour to make it as easy as possible for a student to pay back their loan and are happy to help them with a variety of options.

“If a borrower is suffering hardship they may also phone us to discuss their repayment options, as many do, as it may be possible to reduce their repayment obligation for the year.

“If borrowers intentionally refuse to repay their loan, they are doing a disservice to the vast majority of those who do the right thing and pay back their loans.  

“Bankruptcy and its continued effects on the borrower need to be thought about and consequently seen as a last resort.”

It also points out that not everyone with student debt, who declares bankruptcy, is driven to do so primarily by their student debt.

“Bankruptcy may be the result of actions taken by the individual or by creditors other than Inland Revenue. It is likely that most people in this situation also owe other creditors and their student loan is not necessarily the main driver for bankruptcy.”

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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It's absolute stupidity saddling young people with 40k of student debt for a BA.

How about the Govt fully funding tertiary education and backing our young people.

Have a look at Germany. Zero fees, highly educated trained population.

to do that you would have to go back to when i grew up and you had to pass exams and to get funding (bursery) it would depend on your ability plus you had to work to top up any expenses.
now you just rock up to university get a student load and as long as you can pass the papers stay as long as you like

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Yes, so stop the loans/debt, reinstate entrance criteria, fund universities, and slow the deterioration of standards.
Why undermine academic integrity with 100,000 international students each year, many of whom cannot realistically cope? It's great to host students for reasons of cultural broadening - not so great to use them as pure income generators.

Another spot on comment.

govt does care about NZ, only growing their little empire of making money out of rich foreigners to the exclusion of New Zealanders. It's happening in everything farming, housing, education.... the list goes on.

Its all been done before.
The Fortunes of Africa: A 5000-Year History of Wealth, Greed, and Endeavor by Martin Meredith. The financing of the Suez Canal in Egypt followed a pattern followed again and again, both before and since. First, an African ruler puts forward ambitious development plans. Next, eager western lenders finance those plans, but inevitably in an amount and scale beyond the means of that country to repay. Then, when that country finds itself unable to pay, Western governments in support of their lenders take over the financial mechanisms of that country and impose measures of austerity. Which all results in unrest and rebellion among the population. And so it was in Egypt:

http://www.amazon.com/Fortunes-Africa-5000-Year-History-Endeavor/dp/1610...

Yes it always starts with Politicians and bureaucrats......and a stick and a carrot!! Whether it is education, housing, healthcare, terrorists, war etc some of the group always take the pills. The use of Fear....and....Greed......a person is always promised that they will in some way be better off !!! You would think that with all this education that was meant to create a smart economy that people would not be so mentally constipated.

"Of course the people don't want war. But after all, it's the leaders of the country who determine the policy, and it's always a simple matter to drag the people along whether it's a democracy, a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked, and denounce the pacifists for lack of patriotism, and exposing the country to greater danger."

-- Herman Goering at the Nuremberg trials

“Whether the mask is labeled fascism, democracy, or dictatorship of the proletariat, our great adversary remains the apparatus—the bureaucracy, the police, the military. Not the one facing us across the frontier of the battle lines, which is not so much our enemy as our brothers' enemy, but the one that calls itself our protector and makes us its slaves. No matter what the circumstances, the worst betrayal will always be to subordinate ourselves to this apparatus and to trample underfoot, in its service, all human values in ourselves and in others.” Simone Weil.

Because it's a business

Hardly - you seem to have missed National's latest changes to disadvantage kiwi students even further.

I disagree Mortgage Belt.....the delivery of Education is inefficient and enormously expensive and what you are proposing would take us right back to the even worse previous situation.

Exactly.

Full score for MortageBelt. Education is the key to prosperity and by putting people off it through ridiculuously high fees, it will make us all the poorer long-term. Or, to stick with the popular Chinese theme, do you all want the day to arrive that only cashed up Chinese sent their kids to university while Kiwis mutate into the whit, over-indebted trash of Asia?

Nothing is as ill-conceived as full-fee paying education for your own people. Education is not a personal luxury, but a contribution to society.

No wonder, that China has risen from 3rd World country in only two generations, while NZ has remained stagnant and still depends on bloody cow milk for its prosperity. The Chinese value education and for us and our dim witted "economists" it is just a tradable commodity.

The problem then is who pays? I mean it isnt the Goverment paying it is the tax payer. For some Degree's that are of strategic or social importance, says dentists, doctors, engineers then caps on fees should be considered. eg I think a dentist can end up with $100+k debt? that is just crazy. Who limits "useful" degrees? right at the other end what about "professional students" who have no intention of ever working? Over supply of law degrees? why would we want to supply even more?

My $40k of student debt for my initial BA was one of the best investments I've ever made, Auckland housing aside. The key is to make sure you get into a high paying job at the end of it though. It took a while to pay off but I wouldn't have done it any differently - or a different course for that matter. The world needs more philosophy graduates!

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There is a serious distortion of intergenerational equity in New Zealand. The young have to face near user pages while the older kiwis get universal superannuation. Yet another issue the government buries it head in the sand over. The government has to go.
Highly educated kiwis are the future of NZ. There needs to be a rebalancing of funding.

Totally agree.

"Highly educated kiwis are the future of NZ." Probably too late, I am afraid. NZ squandered the last decades on pumping up housing bubbles while the rest of the world developed new industries and products. Honestly, what does a highly educated person want to do in NZ? There are only few jobs for them, and motsly in nonsense areas such as accounting, law, economics. There is no science infrastructure, little engineering and no IT industry to talk of.

Indeed. Any educated person with a clue gets the hell out of New Zealand and sadly so many have no intention to ever return.

Frankly, who can blame them. The place has very little to offer anymore.

Speaking as a software developer (and immigrant) I disagree. New Zealand has a vibrant and growing IT industry, we punch well above our weight. The problem is a lack of kiwi candidates, I've found that only around one in twenty are New Zealand born. The industry is swamped with Indian and Chinese professionals, often with poor English communications skills.

Yet another ponzi/bubble in the US and we are heading in that direction as well;

http://www.zerohedge.com/news/2015-06-30/no-end-sight-higher-education-m...

Education should never have become a business.

Interesting - in the U.S., student loans cannot be absolved via bankruptcy.
Won't be long until National passes another law in line with this - to make the student loan last a lifetime.

I wont count on that with this government, the students would get together and it would show up in some poll so they would back down.
they could have scrapped interest free loans years ago but they wont as they will lose a few votes

Making student loans unable to be absolved via bankruptcy is exactly what should happen...

So someone who defaults on "normal" debt eg CC, HP etc due to incompetence gets out of the debt but not a student who may have a good reason? Cant see why that is acceptable.

The difference is 'normal debt' involves risk analysis, often requires security and an assessment of serviceability of said debt is carried out...

Further education is a 'want', not a 'need' (though I do agree with your useful statement above).

Who would really have a problem taking a student loan in the knowledge that if they were 'incompetent' enough to file bankruptcy, that debt would still remain. It's a debt to society that they have taken to further themselves, increase their chances of a comfortable life, feed their ambition and more importantly earn more. Why would they have problem with that?

Odious debt is odious debt
Students don't want the expensive education, they need it for a reasonable job these days, theres been a general inflation of qualifications.
A modern 1st world country needs educated people, and would earn more in taxes.
New Zealand has devalued paid work in comparision to housing.
They won't have a more comfortable life compared to previous generations.

Of course students don't 'want' expensive education. I like free stuff too. It's clearly valid expense though, otherwise no one would to it. As a whole, this 'over educated' population you speak of has hardly even begun their contribution to society. Unfortunately the undereducated people currently running this modern society have drummed into anyone under 40 they won't be able to live happily ever after without one...

The difficulty with a student debt is that often the obligatory amount (IIRC of 10% of income) is a pittance of the interest charged (7% of 4 years of large university fees and survival level living). On an entry level position that pays over threshold the amount paid off will be less than the interest accumulating.

So not only is the student a debt-bound from 3 or 4 years of commitment, they also have to face compounding interest over that time and until they can "catch-up" to the wage level where that 10c (IIRC) actually is enough to pay down principle.

And during that time they need to pay all the life start-up costs of accommodation and travel and expenses of getting into the workforce (getting to interviews, interview quality clothing, research costs) and modern day necessities (cellphone to be contactable by potential or new employers, internet for bills and banking, computer or tablet capable of running those services).

Unless one gets a gravy train job (like my bother getting a start into Aussi John Hopkins hospital) it can take decades to pay back that student burden. The two years I put on Student loan took seven years working entry level IT and retail jobs and severely reduced my disposable income and debt servicing ability.
I couldn't get beyond entry level IT because the bank wouldn't lend my the money to do my MSCE courses since I didn't have the disposable to service it as unsecured lending, even though I had done all the borrowed materials, and the company would refund the exam fee if I passed. The little I had left at entry level $27k in 1998, 32k in 2001 (gross) just wasn't enough (my job required me to have a car).

If you live in NZ, the compulsory repayments only apply if you are employed and are currently set to 12% of income over ~$19k annually.

Interest is only charged if you are living overseas, so people need to think long and hard about leaving NZ if they have a big student loan, and that's the point - to stop the brain drain.

For what it's worth, I finished Uni in 2008 with a $20k student loan and got a job nothing to do with my studies. I still managed to pay off my loan within 3 years, and I would have paid it off earlier if it made financial sense.

I ran out of funding part way through my NZQA related course and got a job that paid approximately $20k, which the HoD said it was ok to part time my course as it was all material I had life experience in anyway (until exam time).

When the franchised retail (company) store I was working at sold to a new franchisee I was offered a $7k pay in retainer and half the commision (1%, not 2%) and a lift of minimum qualifying target to qualify to receive my commision. The new owner also refused to do any secondary (shop orientated) advertising. Since the store/business was sold, my employment agreement with the franchise was immediately terminated and I had no legal standing with the new owner.

It took 7 years to pay off that student debt and was an enormous burden - especially when dealing with a payroll error from a previous workplace (the payroll person had declared all my vehicle reimbursements as Gross Income, yet not paid PAYE on it, before their business made me redundant and went under a year later. It was following my unpaid redundancy that I took up the NZQA Certificate in Business Computing).

so while it's lovely you managed to complete in 2008, others aren't so fortunate.
Sadly, paying off the IRD for PAYE I didn't owe them was a higher priority for me, as was trying to maintain my fiance' and to finance a business development as I was unable to get a job....which is why I had gone back to the NZQA course in the first place....

If you live and work in NZ you actually have it pretty sweet....

If you're living and working overseas you have to consider things like the exchange rate as well.

a big issue is the proliferation of degrees for a variety of subjects that are completely non productive and lead to nowhere - no jobs no income generation. I totally believe in funding a first degree - after that graduates can seek scholarships/bursary or private funding - or fund from their additional salary income that the degree should provide. An alternative would be a graduate tax - where an additional 1% tax is levied for the rest of your life reflecting the contribution the state has made in funding the education that has led to your enhanced earnings. we need a higher educated workforce to deliver increased productivity and higher paid industries and employment rather than being totally reliant on our primary dominated industries and a housing bubble

Degrees are not and never have been designed as job training. Using them as such is a disservice and warps the purpose of the degrees AND the market that gets stuck with them as a Performance Indicator.

The current university system was established in 1088 in Europe. Before then it was set up by a woman for scholars to assemble and share work and information and increase the growth of knowledge that was constantly hampered by distance and isolation of researchers in their own fields. (eg one city might be studying language, while another city would have scholars looking into biblical history - but they really needed the same materials and the methodologies and results from their work cross seeded each other - in different towns the councils were at odds to promote the town, but in a university all information could be shared (and protected from the population so less repression was required). It also meant person researching into areas such as human medical and surgery could be watched for unethical practices.

It is not about training people for practical work.
Never has been.
and orientating it so actually destroys it's purpose as a research and human etc good ... as it will devolve into whatever can be marketed or sold. Wasn't it just yesterday it was remarked how scientists working for corporations need to keep their work silent? Not only that but in such an environment who pays for the blue skies research? or the unpopular topics? It comes back to those towns that would only allow scholars to study what promoted the town, and then isolated that to the town (that's why during the Renaissance the Medici's recruited scholars from far and wide, they _bought_ fame and learning for Florence, and thus made Florence a center of learning (not just military mercenaries)

In the 21st century a degree can be both: holistic educational development of the individual as well as heading towards a reasonable "industry-readiness". Even Arts students are offered internships etc now as an acknowledgement that they need to earn a living as well as have grown intellectually/personally.

That's not quite accurate Kate - and - from what I have read - a good chunk of the students loans comprise accommodation allowances which were never heard of in my day - and I did have to pay something - not a lot - self funded - most of my income from part time work - but certainly something

You wouldn't be able to afford the accommodation on most part time work now.
Many students in my circle back in the 80's were still living at home or had parents subsidising their flat rents.

I was at O'Rourke House hostels when they knocked it down.
My first accommodation there was a "pre-fab" about 2.5m x 3m long and less quality than the shed we kept chickens in on the farm. Its window was in the jalousie style (slats/louver) so it was a cold as ice and no point worrying about insulation that it didn't have any of.
And since my one shared the wall with the toilets and showers, my door shared a corner with the door to the facilities I got to hear anyone going toilet or frequently throwing up in the hand basin or toilets.
It also didn't help that 2 nights a week the university had set the lab or tutorial at the same time as hostel meals were served and the hostel refused to hold meals (as their kitchen staff had to go home). Not that the evening meals were healthy in any form.

This is what we signed our bursary/scholarship money away for, as that went to the accommodation and food cost at the hostels. So we didn't need a loan or allowance, sinc ethe government gave us that bursary/schol money.

What's not accurate? The group that put it together (RockEnrol) are pretty good about their research.

I'm assuming what you paid was not fees, but a contribution to your living expenses? I self-funded my beer and concert money as well. And, I had to buy my own slide rule (first undergrad year and then my first calculator) and I also had to buy my own textbooks - but those were second hand and very cheap. Whatever, you might have forked out for in your day, it was nothing like 2,000+ in fees for every single paper.

You are arguing about paying peanuts in comparison - and no money lender in those days would have gone anywhere near you in terms of debt. Student debt is the ultimate of neo-liberal disdain towards society at large.

They might be pretty good about their research - but they are wrong

I have challenged this before - and it comes up again and again. I lived at home for the first 2 years then in a boarding house and I am not including any of that in my Auckland University costs

The banner advertisement on the facebook page screams "FREE"

Well it wasn't free - you should check it out with some of your older faculty members

Start with the compulsory Student Union Fees which were absolutely compulsory and weren't cheap - they were ridiculously expensive - No pay - you didn't get into the university - it was compulsory - not optional - it was part of the freight - I was never part of the campus crowd - never used the student facilities - I had to work

I know - I was there - what are the credentials/authorities of RockEnrol

What I'm not sure about was if you entered as an adult student 21+ yo without University Entrance exam there were some, if not full charges

I'm all for a re-introduction of free tertiary education for all locals born here who meet a minimum entrance standard for all the reasons given by Two Otherguys 2 months ago
http://www.interest.co.nz/property/75604/net-migration-hit-56800-april-y...

My first Student Union fees (UC) were around $60 (1984). To give some comparison, a jug was about $1.20 on campus, maybe $1.50 at Nancy's.

The 'campus crowd' and student facilities are part of the intellectual and logistical supports for tertiary education. And education was free enough but rather exclusive, and the last generation to benefit from that - as the ROckEnrol site displays - is the one in charge now...

Yes that's where I made my big mistake.
A well meaning veterinarian friend of my family, and one of two that had degrees in our circle of contacts (the other was an engineer and a bit of an oddball from a wealthy family) warned me off joining clubs and groups at campus "as they'll just be a distraction".
This meant that I had no peer feedback to make up for the gaps in my knowledge and university back then was definitely setup with the expectations that students entered into the system fully supported and informed (ie parents were either in education or had degrees, and were connected to businesses or families that would hire or marry off the graduating student)

It is the curse of older people that they remain stuck in their own era and do not understand or empathize with the young who have to face completely new challenges.

Sucking the marrow out of people who are trying to get tertiary education is plain wrong, full-stop. The government pays for so much crap left, right and center. There is enough money for education. But maybe they prefer a dumb and easily controllable population.

are you saying correcting a misleading inaccurate statement shows a lack of understanding and empathy? or are you just being ageist?

I think a lot in the older generation are very selfish. Personally, I dont think that you are one of them, as you obviously care enough to spend time writing here and discussing with younger people.

Still, I feel that as a group the boomers are a despicable lot. Made nearly no contribution, but plundered the hell out of society, not even thinking about what it does to their own children. It is not ageism. More a disdain for the hypocritical 60s way of thinking and life.

Well us despicable boomers built and paid for the roads you drive on. Built the hydro dams that power the stupid ithings the younger gen have glued to their face. In other words, boomers built the infrastructure. That's our contribution.

Auckland Southern motor way 50's
Harbour bridge 50's
Auckland airport 1960

Boomers gave the youth:-
User pays
Student loans
Unaffordable housing
Mass immigration

Maybe if you had to fight a war you wouldn't be so selfish

Hate to burst your bubble Moa but most of the infrastructure was built by our parents and grandparents

Much of it built on debt - too much debt, that's what caused the crisis in 1984 - and then the next boomer government of the day sold a big chunk of it at knock down prices making their Fay-Richwhite mates multimillionaires in the process.

And what did Fay-Richwhite do wrong? Not much, it is them that got to cruise around on America Cup boats. The heady days. Not Fay-Richwhite's problem people didn't do thier research and every man and his dog thought they themselves were mini Gordon Geko's. Caveat emptor and all that.

Fay and Richwhite were also [in addition to 'the Winebox' murk , that is] involved in a series of transactions between 1986 and 1993 involving their companies European Pacific Investments; Capital Markets; Fay, Richwhite; the Bank of New Zealand; Tranz Rail; and Telecom New Zealand, transactions in which they personally gained over half a billion dollars at the same time as their minority shareholders lost NZD$277 million. Fay and Richwhite also made NZD$274 million from sales of Telecom New Zealand share options in September 1993 without having to put up any capital in advance.

But the government and their advisors said it was all Ok, in the Winebox debacle.

The people did their research and said no.

Government just do what they want and are protected from the consequences.

moa I think you mean "were paid good wages for putting in places the roads you drive"
A lot of the Hydro Dam labour was imported from Italy.

You got paid while making and enjoying the infrastructure.... paid for with debt, which mine and future generations are footing the bill for ... while you enjoy cheap entry level housing and land, low restriction to trades and employment, and a world where your labour had capital value.

Seriously. try it for a month, as if you were a college leaver or a person ejected from employment without owning house, and to get job outside your existing field.

My latest employment application was rejected by the automatic personality profiling computer system - didn't even make it to CV being read. You'll remember how that was when you were seeking employment? And I hear boomers complaining about having two or even three jobs...wow, one would be nice...

BTW. Here is a video clip, Monty Python - The Four Yorkshireman. I'm the one with the cigar.

https://www.youtube.com/watch?v=Xe1a1wHxTyo

PeterPen - I was born in 1963 so by many NZ measures fall into the BB generation.....it is absolute crap that anyone in my age group had it easy.....most of us didn't get the luxury of an education beyond 5th form.....that's right school Cert.

Getting out and getting a job and not hanging onto your parents apron strings was the norm. We were paid youth rates just like now, paid secondary taxes on other jobs, it was common for many people to work 2 jobs. A pair of jeans costs about the same today as it did back in the late 1970's early 1980's as what a pair costs now. In 1984 I was 21 years old, about the same age as most young people finishing Uni....I had worked 5 years by the same age as your generation....and then the shit hit the proverbial fan.....snap election, NZ economy in the crap from all the social and think big project spending. agricultural subsidies to boot......personal taxes were high and there was that horrible sales tax so items like refrigerators etc were very expensive.......it took 3 years for the head-cases in Auckland playing their stupid share market investment games and then the real crap finally hit the fan in 1987 culminating in interest rates of 21%.

My age group who are also labelled as BB'ers got completely swamped....there were was no social support. We worked and dragged our kids up around our businesses.....so don't go telling me that older generations were selfish or that they plundered the hell out of society or that they are so selfish they don't consider their own children....my age group know exactly what led to the economic changes in the 1980's and do you know, what I see, many of the younger spoilt generations as being the ones who are plundering it for their kids today by demanding enormous Government spending on stupid social programmes like WFF, housing supplements, interest free loans for their education, childcare and child support payments of numerous sorts.....

If you really want to find where the problems lie look at the enormous cost of social housing...The State funded housing in the 1960's grew the economic problems of the 1970's and the young people of the 1980's bore the brunt.....

There is a cycle of one generation being independent and the next one always having their hand outs......Now I figure that I have paid taxes all my life, my contribution has been enormous I have produced and export quality products and the only thing I will ever get in return for my hard work is a pittance in superannuation....and the older I get the more determined I am that I will get what I deserve. I haven't got my hand out like your generation of which I am still funding today.... I see it as if I don't stick up for my rights your generation will take the lot!!

The majority of the generation of young people have made no contribution.....few of you have entrepreneurial skills, few of you are involved in exporting goods and services....you have been free loading on the efforts of your parents. And if you don't believe me go look at things like Government Debts.

If you think it is so inaccurate - tell us what those "crippling" student union fees were! Did you exit university with a debt? How much?

Are you trying to be inflammatory - no they weren't "crippling" but they cost 4 weeks of my wages up front, each year, but you are deflecting from my original question, how much of the student debt is accommodation allowances which cannot be categorised as tertiary education cost, and another point is if you read the subtext of this article, tertiary education now in the new millennium is "scot free" for those who have had their debt written off or those who have taken advantage of our bankruptcy laws

I went to University part time, worked for IRD, paid my own way, pay-as-you-go, no debt at the end

No, I'm not trying to be inflammatory - I am inflammatory. As I said earlier - the now accepted practice of lending money to young people with no certain means to repay that debt is what I see as the biggest crime/ponzi scheme neoliberalism has wrought on the future. If a person is capable and motivated - society benefits tremendously from their higher education and/or skills/trade training.

The bursary and trade apprenticeship systems of the past are the mark of a wise and enlightened society.

So you paid your own way sacrificing 4 weeks of (taxpayer paid) wages - well done you.

"society benefits tremendously from their higher education and/or skills/trade training."

Yes; and so do they. Which is why it is fair that they should share with society, the cost of providing them with that higher education and training.

and society benefits greatly from the low cost and social input of people without higher education.

That "higher education" = "greater social benefit" is just rubbish propaganda spread by themselves. Many do not use their :higher education" and do not use it well. Often (quoting Massey Careers advisor from this year) "A degree opens the path to many positions. Only a few even in the field of your degree. In many cases it's just a matter of having a degree, any degree that is needed."

Or they are like are like doctors and lawyers, any "benefit" to "society" (or social capital) is entirely lost to their price gouging. Instead they get to revel in their own tribal clique based of overpayment and privilege. The only "society" these folks help are themselves - and they will lie and ignore whatever they have to do to keep it that way AND they are used to that and consider it ethical and normal. They are those whose mindsets say "but we deserve it"... and they'll accept any excuse that says they do. Including "we're a great social benefit to society" regardless of what they do - and they set themselves up in favourable positions seldom based on skill but on ownership of Henny Penny's piece of Paper which tells them they are somehow wiser than others. Yet those are the same theory blinded fools that lead the world to ruin; some "tremendous social benefit" that.

Anecdotal example: dental council statement in rejecting an applicant's credentials, "We're not sure Harvard's training is equivalent to that at Otago." Sure isn't you ignorant vipers.

January 2013
My partners daughter is 25 year old. Did a 4 year BA degree (Hons). Has had a part time job since the age of 15. Paid her way herself without financial assistance from her mother. Paid her course fees as she went. Total cost just under $30,000. Graduated 2 years ago. Debt free.

http://www.interest.co.nz/opinion/62653/fridays-top-10-nz-mint-basel-bet...

Living at home I assume - a real bonus for students that can. But simply not possible for all students - not all live in a uni town. And many degrees are specialist in the sense that they are not taught/available everywhere. The degree programme I teach in is a professionally accredited one - only three institutions are accredited in NZ for the undergrad degree.

Good on your partners daughter - she's a lucky one.

My ex wife, with part time job. took 2 papers in two semesters, living in a house we were paying for. She only passed two out of four, so didn't get student allowance from then on. That course cost $4,000 we didn't have, and since she didn't pass two papers she didn't get the raise from the bank. She finished the program after we'd split up, and she was living with my son and her boyfriend (in the house his parents bought, running his families electrical trade business), she on either DPB or student allowance. according to the letter she send CS during the administration review, she had $20,000 in student debt in 2008. Administrative review people said they wanted to take even more than the $8000 they took from me that year (my gross income for the year was $5000) because of her enormous debt and difficulty. She got all the assets, I took the family debt, when we split.

In 2007, I was on sickness benefit without any accommodation allowance, and getting back into the IT industry was proving impossible without a piece of paper saying I had the skills I had. Benefits in NZ are administered on a poverty policy (they _deliberately_ design them to keep beneficairies in a state of poverty with the theory this prevents moral hazard of people deliberately seeking to live off them. Sucks for those who fall on to this government managed "safety net"). Taking one paper a semester approx $750, I had to pay $700 a semester in compulsory Student Union/Student Services fees - bill padding with services that I did not want. I talked to the people at teh Student Union; they said "I had access to them the same as everyone else so I should pay for them". I point out I did not want their services and I did not require their services at all. They said "That's your choice but you get offered the same as everyone else so you have to pay for them. If you don't use them that is your choice".
So from now on I "offer" joint trips to Mcc's and to grab some drinks together....

But as a part time person, it was costing nearly the same in Student Service fees as it was for the course. Way out of reach for a beneficairy, and student loans were out of the question for several reasons, not the least of which was the inability to take a FTE (full time equivalent) course, thus not qualifiying for the living costs portion of the loan (which wouldn't have covered the house repairs)

I notice that Massey University has revised its Student Services fees since my previous enrollment.
Two papers are currently costing around $270 total. A much more reasonable price. (Out of the $1935 total fee for the two papers. One Internal, one by "Distance Learning")

Sadly the world doesn't owe you anything.
What would be nice is that if government would keep fees and debt to students low so as not to inflict economic damage to ex-students (graduate and non-graduate) in the future.

Not only do the typical ex-students come out with large financial burden which must be recouped from their employers customers, but those ex-students also face large subscription or industry certification costs that the previous generations never had to worry about. All good and fine if you end up working at Microsoft or for NZ government or even a national real estate company that pays for it's employees licensing/certification needs; not so good for the majority of NZ businesses forced to compete with such organisations !

why do people compare different generations and say they get less. My parents generation had "free" education, I was second year student loans. Nz was also considered a Banana republic at the end of our socialist system. We were broke, our country had started living past its means, and things had to change.

Today, while we still don't pay our way in the world, we have benefits galore, paid parental leave, extra weeks holiday, and even today we have increased payouts, reduce some government costs (Acc levies).

We are heading into the direction of Greece, because no one can understand that a country can't live past its means forever

Greece is a basket case in its own league. Greece is totally corrupt. It has no proper tax office. It does not even have Councils that keep reliable records on ownership of land. And that after 40 years of EU membership - less governance than many a 3rd world country. That what free money does to societies. It corrupts them.

Greece is a failed state. NZ has in principle all it needs to have a future, but Kiwis are too timid and miserly to vote in politicians who have the courage to try anything new. NZ is badly mismanaged in most policy areas and it too often does not stand up for its own interests. Why, for example, is there still such massive migration when infrastructure cannot cope and many migrants come from the world's trouble spots bringing their conflicts into our society?

Yet Greece has the highest ratio of government employees in the world :)

From 1950 - 1980 NZ doubled its welfare entitlements / payments and with the Britain joining the EU, the oil crisis etc were we broke.

NZ has been a trade debtor for the last 40 years, we haven't paid our way in the world, yet we believe we are entitled to all sorts of government entitlements and improvements in living standards.

History has shown that we use migrants to do meaningless, boring jobs, because we and our children are simply too good to do the jobs are grandparents did.

If my grandmother had run the country for the last 50 years, and she ran it liked the values and morals she taught me (esp. the keys about savings,debt and self responsibility) then we would still:

only have two weeks holidays,
Only spend the money we actually have,
Don't borrow money to fund our lifestyle,
no DPB,
no government bailouts of companies or cities,
no Government kiwisaver, ACC, health and safety,
very few hand outs. etc etc

but for some strange reason we believe that we can work less and receive more and this has resulted us owing $ 247182 Million to overseas creditors (source http://www.tradingeconomics.com/new-zealand/external-debt)

Every Man, woman and child in this country owes over $55k to oveaseas creditors.

and our total debt is a lot higher including debt acquired internally. - according to http://johnpemberton.co.nz/html/total_debt_.html its 512406 million = $113k per man woman and child.

Can you pay your share?

So this is very unclear at the very least If not a downright mis-direction. For instance you start with welfare payments doubling in 30 years, yet 70/30 = 2.33% in inflation per annum so, so what?

We dont believe we can work less, NZers probably work far more hours than many other nations citizens.

"But figures show Kiwis, and their Australia counterparts, work longer hours than many of their OECD counterparts with 13 and 14 per cent, respectively, working long hours (classed as more than 50 hours a week). That's above the OECD average of 9 per cent and higher than Denmark (3 per cent), Canada (4 per cent), Britain (12 per cent) , and the United States (11 per cent)."

"receive more" then you link it to debt that simply isnt justified as much of it is private.

history has actually shown that we use migrants to do _skilled_ jobs, doctors, unions, expert hydro damn engineers and personnel, bankers/finacnial advisors, university professors, and business people. That's why there's a test that immigration NZ are supposed to use, and why the OIO is only supposed to allow sale of assets to strategically important contributors to NZ.

Other countries use migrants for railway labour or slavery.

Oh ... and I do not owe any foreigner anything. The only contracts and debts I honour have my name at the bottom of them - you want to find a scapegoat for your debt...you find the clown who signed the documents (and took consideration for doing so).

Yes there are too many giveaways. Why's that? because _imported_ experts have been advisors, professors, and unionists in control of such social things with no regard for NZ's size and lack of time generated wealth. (we haven't had 800 - 3000 years to develop infrastructure and hoardings)

"History has shown that we use migrants to do meaningless, boring jobs, because we and our children are simply too good to do the jobs are grandparents did" from what i can see that was only the case for one period where we allowed pacific islander in for such work. These days you pretty much have to be degree qualified and have a job offer to come here.

yes we have too many necessary giveaway.
not all of us get parental leave.
not all of us want doctors and medical profession to be further subsidised by the workers (acc)
and that extra holiday time has to be paid for by somebody (price of living goes up) and it's a pain in the butt for employees who hire good people for their needed skills.

it's not just that we aren't paying our way in the world - it's that educated (and uneducated alike) most do not know what that even means. To many people they believe government books aren't like household books, that government doesn't have to live in their budget. Despite any evidence they cling to that nonsense.
They are unable to grasp to to have massive payouts (in government benefits, property (eg nice MBIE style foyers or fancy beehive buildings, or salaries) then the burden falls on to the private sector to make up the price. the more the private sector carries the less it can reinvest into itself.
And every bit of government borrowing is a burden for the future generation to carry...who end up with more of the same people hiring like-for-like into government and political Party...resulting in the same basic philosophy and kicking of cans.

“We endeavour to make it as easy as possible for a student to pay back their loan and are happy to help them with a variety of options."

- Yea Right......

Hmm... I often wonder why the issue is always student "debt". It's not like university is an unexpected expense. In actuality, you have an 18-year advance notice. Rather than borrow money at the time, why not save money over those 18 years? Our kids' uni savings accounts were established immediately upon their births. Most of the money has come from us parents but there have also been contributions from the grandparents. Of course, putting aside this money is easier for some than others; we're fortunate to be able to do so.

There was no 18 year notice for most of the current student loan holders.
That notice period was only achieved for todays 23 year olds (5 years ago).
1992 & BAM... 9% interest

Save what?
Many people struggle to survive to live and Kiwisaver is a big issue for many (at 3% gross of income)
Paying down their mortgage or student debt as fast as possible is "big savings" to many of them.

Putting money aside, US style, for the kids university fund is well beyond the means for the majority of New Zealanders that need it!!
-
Although having said that.
My personal plan is/was to have a Trust setup. Buy reasonable house that could do with a bit of tidying up in a University city. My "savings" is the deposit and rent it out until needed. Kids can live there, reducing the rent burden, they run the flat, including meeting the mortgage payments and dealing with flatmates.

The course fees get redrawn on the mortgage, which hopefully will be covered by capital gain on the house (and the pre-kids tenants).

when the kids have finished with the house, any debt from the course or emergencies would just be paid off by rental tenants in the normal manner.

It does require having the ability to get a house for each kid and at an LVR level which isn't too highly leveraged. It's a long term trust investment, not a negative geared speculation.

When house has paid off, any rental income can be used as rinse-and-repeat or for more risky opportunities.

But that's the plan I've been using.