DEBT: NOT AN EXPERIMENT


In a recent Salient article, our Student President, writing about our student loans and debt, said that we students are "part of an experiment as yet untried anywhere in the world." In the strict sense of student loans he may be right but in looser sense he is wrong and through understanding our debt in the following way we can see that we students are not part of a experiment but the victims of a proven policy.

We've all heard the horror stories that it will take many years to pay off an average student debt. Take the hypothetical case of the typical female student, lets call her Phillipa. Figures released earlier this year show that Phillipa will take 38 years to pay back her student loan of $16,800. Given that students are staying at varsity longer, fees are increasing, interest rates are going up and so is the cost of living, I will not be surprised if many students never paid back their loans. Meanwhile, the company Phillipa works for, upon graduation, will be making record profits due to the "reforms" of recent years.

I maintain that this is not an experiment but a policy to redistribute income within New Zealand. Because of cuts in education the government has been able to post surpluses and the economy is sufficiently healthy for businesses to increase profits. This is Robin Hood in reverse, robbing students (and the unemployed, sick, disabled, elderly...) to assist the big business buddies of government.

The inspiration for this income redistribution comes from the "successes" of the World Bank and the IMF. Many countries in the developing world have crippling debt which they will never pay back. Take the Philippines for instance. Not only does it have gross income inequalities and a huge foreign debt but through debt repayment contributes to the "new world order" of the rich countries getting rich on the backs of the poor countries. In the Philippines, peasants work to earn the foreign exchange they owe to foreign banks. A World Bank report actually stated that debt service repayments from the third to the first world now actually exceed new flows from the rich to poor.

Phillipa and the Philippines, both in debt, both may never repay their loans, both helping the rich and all praised by the World Bank and our government.

Rich Davis

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