Tertiary student debt a $10b boil that must be lanced

It is $10 billion and growing by the day. Like a big boil on the backside of the community, it is painful for the victims, worrying to most of us and embarrassing for the Government. It is the millstone of shame our politicians have put around the necks of young New Zealanders. It is student debt and a story of intergenerational theft.

My parents grew up in the 1930s depression and neither had the opportunity for tertiary study. However, their generation voted consistently for governments which made tertiary education free for 50 years. They ensured their children would receive the educational opportunities they were denied. Disaster followed in 1984 as political power transferred from the generation of Prime Minister Rob Muldoon to the post-war generation of Dave Lange, Roger Douglas, Helen Clark and Phil Goff. These Labour politicians set about looting the legacy of their parents and denying free tertiary education to their children.

In their excited neo-liberal rush to user pays, they raised tertiary fees. These were small increases at first, but once governments had forward momentum, they were ramped up to the point where students needed to borrow for polytech or university courses.

The student loan scheme was born, and here we are today with half a million New Zealanders $10 billion in debt. This ignominious milestone was passed last week.

Governments claim they cannot afford to fully fund tertiary education because lots more young people study beyond school these days and it would cost the Government too much. The first part is true but the second is not. It is simply a matter of priorities.

New Zealand can easily afford free tertiary education for everyone. The Government has been running budgets of several billion in surpluses for several years now. These alone could pay tertiary fees and a whole lot more besides.

As if to prove it, Labour and National have lined up for a tax-cut showdown in election year. Each is proposing several billion dollars in election bribes masquerading as tax cuts.

Another practical way to pay for free tertiary education would be to renationalise Telecom. The massive profits from this single company alone would have covered the student fees for everyone these past 20 years had it not been sold by the same politicians who brought us student debt. Somehow, it is more important to the Government for wealthy shareholders to share Telecom’s spoils among themselves rather than return them to the community.

Labour says it has done a lot in recent years to ease the burden on students, most notably by removing interest from student loans. However, in practice, it has allowed tertiary fees to rise at well above the rate of inflation – 5 per cent yearly increases are standard.

At Tangaroa College, in Otara, in 2005, we estimated the tertiary fees for our seventh formers leaving for study at $240,000 for their first year. These were students from low-income areas and the very people needed to receive the opportunities my generation’s parents provided for us.

Its a tragedy that the strongest supporters of tertiary fees still hold sway despite most of the public being on the side of students. These are the likes of the Business Roundtable, which has argued for tertiary fees to treble in size as the Government winds back its contribution from about 75% of the cost to just 25%. They suggest tertiary education is no different to buying a car. Just as we have a choice between a Lada and a BMW, we should enjoy the same choice in education.

But like all choices, how much choice you get depends on how much you can pay. For the wealthy, it is a BMW education for a professional career, while for the poor it is a McEducation for a McJob. There is already ample evidence that young people from low-income communities are turning away from higher-quality tertiary education because of the cost.

It is heartening to see the level of disquiet in the community continuing as it has from the outset. This means each political party will pull some new policy from the bag before the election. Labour will probably write off some debt if students remain in New Zealand and work in their first few years after study, while National proposes to give discounts on debt to students who pay the debts off more quickly. Other parties are suggesting writing off debt for those who have skills which are in short supply.

But none of these policies will do the job. It is reassuring that at least the Green Party and the Maori Party recognise the importance of free tertiary education. The boil must be lanced.