Overseas ex-students should repay loans

Some New Zealanders who borrowed money on a student loan go overseas and never repay their loan. Then if they want to return to New Zealand in 10 or 20 years’ time, they can’t because they owe the government money. They can’t come back for a family visit, for a wedding or a funeral.

Sir Paul Callaghan, a well-know scientist, is suggesting that ex-students pay back their loans to help the government. Rebuilding Christchurch after the earthquake is expected to cost $15bn or more. The government will have to borrow money to do this.

Ex-students who have not paid back their debt owe a total of $2bn. This is not $15bn but Sir Paul said that every little bit helps. The average debt that students owe is $17,000. Most New Zealand workers in the UK and Australia should be able to pay that back in a few years. This is one way they can help Christchurch.

Sir Paul also said that students only paid one third of the cost of their university education. The government paid two thirds. Perhaps New Zealand graduates in the UK will feel an obligation to repay their debt and help New Zealand now.

Many young New Zealanders go overseas after they graduate. The government allows students three years before they have to start paying back their debt. This gives young people time to travel before settling down to a permanent job. After that they start paying 6.6% interest on their loan.

Vocabulary
Obligation – a moral duty, your conscience tells you that you should do this.

Questions
A few students owe a great deal more than the average, e.g. $100,000. Do you think it is too easy for young students to borrow money?

Will Sir Paul’s suggestion make people feel guilty? Does that matter?






2 Comments

  1. Personally, I think it is compulsory for people who have debt to payback.

    If they are not willing to payback, they don’t deserve the
    money for good education.

    Nevertheless, we could give them a second chance to repay their loan so that they can visit their country. We can use that money for a beneficial use.

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