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Posted by Philip on 3 February 2016, 8:33 am in , , , , , , ,

Tertiary education – expense or investment?

Today's NZ Herald editorial lambasts Labour's policy proposal for free tertiary education as an expensive fix with little purpose. Admittedly, I wasn't overly convinced by Andrew Little's stumbling announcement but, all in all, I think scrapping student loans is a move in the right direction, steering us away from the neo-liberal semi-dictatorship John Key's Government has been creating in the last eight years.

The editorial says there are better things to which to add funding and that thousands have repaid their loans but, in the same publication, Raybon Kan glibly disagrees:

So, should we have free tertiary education? Well, yes. Because a country with free tertiary education is a country you'd want to brag about. And besides, loans don't get repaid. They're just a downer.

And debt is a downer. To begin a career with a debt of six figures (which accrues interest) is like working for nothing or worse — paying to work. Even though banks, credit card and finance companies don't want you to know it, incurring debt (or paying money for money) goes against every notion of sound financial practice.

Besides, what percentage of students have repaid loans? I bet it's small.

Tertiary education may not be a silver bullet in today's employment climate, but seeing it as an expense rather than an investment is myopic. All student loans have done is individualised and 'expensified' the cost of education, making young people liabilities on the Government ledger — rather than assets — and ignoring education as one of many ways to grow the country's talent and future economy.

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