The majority of students use their student loans to get an education, then a job, but there needs to be more "respect for taxpayer funding", Prime Minister John Key says.
Tertiary Education Minister Steven Joyce yesterday told TVNZ's Q+A programme the Government was considering limiting the period undergraduate students could access interest-free student loans, possibly to six or seven years.
Mr Joyce also said the Government was considering implementing a two-year stand-down period before new permanent residents can borrow from the Government to fund tertiary studies here.
He told Q+A permanent residents, including Australians, currently wait two years for a student allowance or a social welfare benefit.
"But you're allowed to borrow for a student loan the moment you arrive, and that creates some interesting incentives for people to sign up to tertiary institutions where perhaps they're not as committed to the country, or not committed to tertiary education as perhaps others would be."
The proposed two-year delay would not affect fee-paying international students, "but new residents to the country".
The changes could save about $10 million to $20 million a year on the interest-free loans scheme, which costs about $1.5 billion per annum.
Mr Key today said while the Government could afford interest-free student loans there needed to be greater respect for taxpayer funding.
"The poor old cleaner that's out there, working from midnight to six in the morning, or eight in the morning, working their socks off to get paid the minimum wage is actually paying taxes to go to the students, that's fine as long as the students are actually taking the process seriously."
Taxpayers paid the "overwhelming majority" of the cost of sending a student to university and the students did not understand that, he told TVNZ's Breakfast.
But he said Government would not be doing away with interest-free loans.
"The bulk of students go to university, get a student loan, treat the process seriously and actually form an important part of our economy.
"We need those doctors, we need those nurses," he said.
"But, we will be making sure the systems a bit fairer."
Refugee Services chief executive Heather Hayden yesterday told the Herald her organisation wanted to see more detail around the proposal but would be "very concerned if there was any barrier at all to refugees as new citizens in New Zealand being able to access tertiary education".
"The key goal for us in Refugee Services and for the Government is that refugees move to economic independence as quickly as possible and so any barrier that would hinder that we would see as a major concern."
Ms Hayden said her organisation would take the matter up with Mr Joyce and his officials to make sure refugees were not affected should the proposal be implemented.
New Zealand Union of Students' Associations co-president Pene Delaney said the proposal needed to take into consideration people from countries including small Pacific Island states who come to New Zealand to study, "because there's not necessarily the tertiary infrastructure in those islands to support those types of studies".
Labour Party tertiary education spokeswoman Maryan Street told the Herald the proposal simply had the advantage of looking consistent with other two-year stand-downs for new migrants, "but if we want to make the right skills match for our future then that may need to be reconsidered".
She said the proposal may put barriers in the way of new migrants who want to become citizens and who choose to enroll in courses that complement the skill set necessary for New Zealand's long-term future.
Ms Street was also "deeply concerned" by another proposal outlined by Mr Joyce yesterday to remove the current fee cap on expensive university courses such as medicine.
"That is a disincentive for people to enroll in those more expensive courses and they are typically medicine, dentistry, and other science programmes. Those are exactly the sort of skills we are going to require as we go forward in New Zealand."
- Adam Bennett and NZPA