Colin Ambler/cvnznews.com
Labour is promising to slash student debt by 10 percent and wipe out thousands of smaller loans entirely, pitching the policy as a way to keep young New Zealanders from heading overseas in search of a better future.
Announcing the policy on Sunday, Labour Leader Chris Hipkins said graduates who stay in New Zealand would be rewarded with lower student debt, helping them get ahead sooner and putting more money back into their pockets.
“If you have a student loan and stay in New Zealand, under Labour you will owe less,” Hipkins said.
Under the proposal, eligible graduates would receive a 10 percent write-off of their student loan balance from April 2027. Borrowers with less than $2,000 remaining would have their debt cleared completely.
Labour argues rising living costs and years of repayment obligations are making it harder for young people to buy homes, start families and build careers in New Zealand.
“Student debt can follow people for years,” Hipkins said. “This policy means more money to save for a home, start a family, build a business or simply have a bit more breathing space.”
The party is also positioning the policy as a response to the long-standing “brain drain” of skilled graduates leaving New Zealand. Nurses, healthcare workers, electricians and social workers would all benefit if they remain based in the country.
Labour tertiary education spokesperson Shanan Halbert said education should be a pathway to opportunity, not a burden carried for decades.
“People have done the hard work to get a qualification. They shouldn’t have to spend years watching their student loan barely move,” he said.
To qualify for the initial write-off, borrowers must no longer be studying, remain based in New Zealand and be up to date with their repayment obligations. Those who previously received Labour’s Fees Free support would not be eligible.
Current and future students would become eligible after remaining in New Zealand for three years after they stop drawing down their student loan.
The proposal is likely to become a key battleground in the election campaign, with Labour betting that easing student debt will resonate with younger voters facing mounting financial pressure and difficult decisions about whether their future lies in New Zealand or overseas.
