...tertiary education system is not well-placed to respond to uncertain future trends and the demands of more diverse learners. The system is not good at trying and adopting new ways of delivering education, and does not have the features that will allow it to respond flexibly to changing circumstances.
Tertiary teaching quality is also an issue. The Productivity Commission believes that reintroducing interest on New Zealand based student loan borrowers is the way forward.
It seems that it is probably only a matter of time before interest is reintroduced. We believe that current borrowers, and intending students, need to take this risk into account. The smaller your student loan debt, and the faster you repay it, the less your risk of financial disaster if the law changes. The law can change without your knowledge and the IRD may not contact you until your debt has grown very large. Fees for a course that you have already signed up for can increase while you are in the middle of the course, leaving you in financial difficulty or with a much higher than expected student loan.
If you are a potential student, our advice is to carefully evaluate the likely costs (now and if interest is added) and benefits of tertiary education, before you sign up. It is true that tertiary education can have many benefits, including greater financial well being, but this does not apply to all courses or all students. Many countries have free, or nearly free, tertiary education options. Even in the case of Australia, while many were dismayed at the increase in university fees for New Zealanders, consider that their student loan repayment threshold and repayment requirement is more borrower friendly than is the case for New Zealand.
The main thing is to be aware of all possible options and risks before blindly jumping into debt.