5 May 2010

Students face limit on years for loans

8:07 pm on 5 May 2010

Students look set to have a limit imposed upon the number of years they will be able to access student loans for undergraduate study.

Former students are likely to be charged an annual $50 fee as the Government seeks to rein in the cost of tertiary education.

Tertiary Education Minister Steven Joyce says taxpayers already subsidise interest-free student loans and it is only fair to limit access.

The Government is looking at restricting the time people can draw down loans to about six or seven years for an undergraduate degree.

Other proposals include requiring students to pass at least half of their fulltime course over two years, to be eligible for a loan, and a $50 administration fee for former students with outstanding loans.

At present, the administration cost of the loans scheme is about $50 million a year. The fee students currently pay totals about $10 million and the new fee is expected to raise an extra $15 million in its first year.

Mr Joyce says there will be no change to the interest-free element of student loans, with full details of the reforms to be confirmed in the Budget on 20 May.