Key unconvinced by loans scheme

National believes the Government is starting to realise its interest-free loan policy will mean more students borrowing more money.

Tertiary Education Minister Michael Cullen is closing a loophole to ensure refunds on voluntary repayments taken out since 2004 continue to accrue interest.

Opposition finance spokesman John Key says Dr Cullen is effectively moving to stop more students taking advantage of the system - despite Dr Cullen's original assertions that the new policy would have no impact on students' behaviour.

Mr Key says the Minister may have saved a few taxpayer dollars but he remains unconvinced the full policy is affordable.

- NEWSTALK ZB