In my opinion: Do a degree and what do you get? Debt, debt, debt!
Students in New Zealand often point to Ireland as a model example of where students can participate in tertiary education and come out of the end of their time without a huge debt hanging over them.
In New Zealand, the opposite is the case -- students enter tertiary education knowing that by the time they emerge at the end, they'll likely have a debt of NZ$28,838 (€14,000) and are then subjected to a harsh repayment scheme. In the 20 years since the system was put in place, students and graduates have collectively racked up $10bn (€487m) of debt and by 2020 this figure is likely to double.
It is outrageous that the Irish Government is considering introducing a student-loan scheme similar to that of New Zealand and Australia. Such iniatives have been a total failure. In New Zealand, the scheme has been described as one of the biggest bungles of the 1990s and has led to significant unintended consequences not just for students, but also for wider society.
So what are the effects of the loans scheme? The scheme encourages borrowers to leave New Zealand and find better paid work overseas, where they can pay off their student loan faster. Many never return, and New Zealand loses out from the loss of skilled graduates.
The student-loan scheme has also had a considerable influence on borrowers' life decisions, such as home ownership and starting a family.
Professor Ian Pool, one of New Zealand's leading demographers, noted that "the punitive student loan scheme is probably the most anti-natalist measure ever put into legislation by a New Zealand government ... We in New Zealand seem to have forgotten the demographic truth that repayment starts at exactly the moment graduates need to set up businesses and start family formation.
'In the meantime, we have lost by emigration, and perhaps lost to parenting, a generation of our more skilled."
Declining fertility rates can have a widespread impact on the welfare of general community. Like other developed countries, New Zealand's population is ageing. As the supply of working-age people declines relative to the number of non-working-age people, the government is likely to find it increasingly difficult to meet its various social obligations (maintenance of access to health care and education, provision of welfare and superannuation support).
Declining fertility rates are likely to make this problem worse, by further reducing the number of potential workers.
The student-loan scheme is also profoundly inequitable. One of the key concerns with the student loan scheme when it was first introduced was the issue of interest. New Zealand Union of Students' Associations and the women's group within the union ended up taking a human-rights claim against the government, arguing that because of the inequitable pay gap in society, women took longer to pay off their student loans because they paid more interest and meant that they ended up paying more for their education than the average man.
The Human Rights Commission in New Zealand accepted this claim and as a result the Government wiped interest off student loans from 2006.
The New Zealand student-loan scheme has failed a generation of Kiwis and student debt will continue to skyrocket. The Irish Government would do well to learn from these mistakes when considering implementing a student loan scheme in Ireland.
