Shamim Kassibawi: "I'm so angry about this whole system." Photo / Supplied
It’s our Generation Debt - 1.3 million New Zealanders who took out student loans between 1992, when the loan scheme started, and 2017.
Between them, they borrowed $26.6 billion, on average $20,500 each.
Their loans helped shape their lives - the subjects they studied, the careers they chose, where they lived, how soon they had children and whether they could ever afford to buy houses.
Their lives were unlike those who came before them, who received essentially free education. University fees averaged only $288 a year in 1988 and $516 in 1989 before Labour's Education Minister Phil Goff hiked them to $1250 in 1990, rising to $1300 by 1992 and $6938 by 2016.
And those who have come after them will also have different lives because, since last year, they have not had to pay fees for their first year of tertiary studies.
The toll of borrowers still owing money on student loans peaked in 2017 at 732,973, when just over one in every five working-aged adults aged 18-64 was still paying off student debt.
That toll has dropped in the past two years for the first time since the loan scheme started, to 708,518 by June this year, because of declining enrolments in tertiary education as well as the shift to fees-free study for the first year.
• READ MORE: Generation Debt: Students scared to come home
Economist Shamubeel Eaqub, who famously labelled today's younger adults "Generation Rent", sees student loans as just one more stress for a group that could be called more broadly "Generation Debt".
"It adds an additional pressure on this new generation," he says.
"Not only are they dealing with the pressure on the educational front, but housing affordability is getting less and they are taking on additional debt. Everything is compounding with all the pressures we see on young people.
"We see technology has progressed, but in terms of life experiences - how much comfort they have, how much security they have - that has been less tangible."
Average house prices have soared from three times the average household income in 1992 to six times average incomes today.
Home ownership rates peaked in 1991, when 60 per cent of the 20-44 age group owned their own homes. That plunged to 44 per cent by the 2013 Census and is likely to be lower now.
Caitlin, a 27-year-old Wellington professional, pays $235 a week towards renting a room in a flat with her partner and sees $200 a fortnight go out of her wages to pay off her $60,000 student loan. She says starting a family will have to wait.
"I wouldn't want to have children when I'm renting," she says.
"I had to move this year when the landlord wanted to put the rent up by $200 a week. We offered to pay $100 more and they refused, and I don't want to be in that situation if I have children.
"I would like to own a house and then think about it, but that's five or 10 years away.
"And I'm in a privileged position. I have quite a secure job, I have a regular salary. There would be lots of people in a much worse position than I am."
Landscape architect Lance Millward, 47, says he and his wife Joleen, a teacher, went to Japan in 2001 after graduating so they could earn enough to pay off student loans of about $52,000 between them.
"At the time it was very good income there and the cost of living was cheaper than Auckland," he says.
But the cost was postponing their family.
"Our children are 8 and 11 now, most of my friends have high-school-aged kids, so you end up with everything quite a lot delayed," he says.
"That means you're kind of forced into having a smaller family unless you take the risk of having children after 40, which they don't recommend."
Student loans have only been one factor in delayed home ownership and childbearing. They made up only 4 per cent of total NZ household after-tax annual incomes by 1998 and 9 per cent today, while total household debts have soared from 75 per cent of after-tax household income to 125 per cent.
A 2003 study by Waikato University economists John Gibson and Grant Scobie found that the chances of a non-partnered person owning their home were reduced by 60 per cent if they had an outstanding student loan, after allowing for age, income sources and other factors.
But they found the opposite effect for couples. Couples were actually 11 per cent more likely to own their own homes if they had a student loan, even after allowing for other factors - perhaps because of factors that could not be measured such as stable career paths and perseverance.
Consequently, Gibson and Scobie found that student loans had no significant effect on the number of children that people had.
A more recent study this year by Wellington economist Isabelle Sin and Stanford's Ran Abramitzky found that domestic students completing bachelor's degrees between 2005 and 2013 were slightly less likely to have children within six years of graduating if they had bigger student loans when they graduated, but again the difference was not statistically significant.
"It did look suggestive, becoming a parent might be delayed," Sin says. "But I didn't have any statistical power to say that confidently."
The 12 per cent surtax cuts in on all income above $19,760 a year or $380 a week. That’s what you’d earn working 21.5 hours a week at the minimum wage of $17.70 an hour, and slightly below the pre-tax sole parent benefit of $388.90 a week.
It's a burden that falls mainly on the young. In June last year, 47 per cent of NZ residents aged 20-24 had an outstanding student loan, dropping to 37 per cent of those in their late 20s, 23 per cent in their 30s, 12 per cent in their 40s and 4 per cent of those aged 50 and over.
Ironically, the surtax means the average tax rate is much higher for many low-paid younger New Zealanders, who are paying rent and caring for children, than it is for better-paid older Kiwis whose homes are paid off and whose children have left home.
In the first 13 years of the loan scheme there were often claims that it was driving people overseas, both to earn higher wages to pay off their loans faster, like the Millwards, and to escape from the reach of Inland Revenue.
One who left, who wants to stay anonymous, finished a master's in architecture in the late 1990s when New Zealand was still recovering from recession.
"There was one architectural job advertised in two months in Auckland. There were 30 on one day in Melbourne. So I left," he says.
He paid $19 a week on his $18,000 student loan, but only for two years.
"Everyone was saying, 'Don't bother, don't be stupid.' So I thought, okay, I'll just not pay, then, especially when I was switching flats and was short of cash," he says.
His career prospered and he bought a house 10 years ago. But Inland Revenue caught up with him when he renewed his NZ passport, and his debt had ballooned with interest and penalties to $62,000. He remortgaged the house and finally paid off the student loan three years ago.
"It set me back years. I would have been out of debt - but no, because of New Zealand," he says.
Although he was born here, he says: "I just think the time I spent in New Zealand was a waste of time."
A 2006 Ministry of Education analysis found that, after controlling for other factors, a higher student loan increased your chances of being overseas five years after leaving study. Only 9 per cent of those with loans under $8000, but 25 per cent of those with loans between $24,000 and $32,000, were overseas.
However Helen Clark's 2005 pre-election decision to stop charging interest on student loans for those who stayed in New Zealand after April 2006 dramatically reversed this effect.
A 2017 study of medical graduates reported that "the rate of NZ medical graduates seeking work overseas has plummeted". Before 2006, 55 per cent of first-year doctors were "considering leaving the country due to student loan debt"; but 94 to 98 per cent of final-year medical students in 2013 to 2017 wanted to stay in New Zealand.
Now that your student loan starts accumulating interest if you leave the country for more than six months, some feel "locked in", afraid to do even the traditional two- or three-year "overseas experience", and punished if they have the temerity to pursue a career abroad.
Damon Rusden, 25, has a $48,000 debt after trying out two other courses before settling on a degree in international relations at Victoria University and a goal of doing development work.
"Even growing up poor in New Zealand, I've always had this belief that in New Zealand we are privileged, so why not make a career out of using the education New Zealand has provided me to actually benefit others," he says.
He took a fellowship in Nepal, but says it is very hard to get into development work, so now he is teaching English at a preschool in Vietnam earning US$1200 ($1900) a month. Out of that he has to pay $2000 every six months on his student loan.
"To me the interest is simply a penalty for those trying to build an international career."
Dubai-based entrepreneur Shamim Kassibawi, whose family came to New Zealand as refugees from Sudan when she was young, studied international business at AUT.
"To be able to graduate with an international business major, you had to study abroad for six months or work abroad for a semester. I couldn't afford to just go and study so I ended up working abroad in Dubai," she says.
Kassibawi, 32, has started a series of businesses there in public relations and marketing, including an app to help parents meet other parents with children of the same age. She is helping set up a Middle East NZ Business Council.
But she feels "demoralised" by a student loan that has grown, with interest, from $28,000 to almost $50,000.
"If you leave and try to make it big elsewhere, we will increase your student loan," she says. "Travelling is so important. It brings so much back to NZ. I'm so angry about this whole system."
Herald political journalist Claire Trevett believes the student loan scheme has created a "generational wedge".
Trevett, 45, started an arts and law degree at Canterbury University in the scheme's first year, 1992.
She borrowed about $55,000 for fees and living costs in the days when you had to pay interest from day one, starting in 1992 at 8.2 per cent.
The interest was more than her repayments in the early years, so her loan escalated to $90,257 until interest was abolished for NZ residents in 2006.
"I thought I would have a student loan all my life till interest-free came in, because it would just go up every year," she says.
"It was so overwhelming I just closed my eyes to it and pretended it didn't happen."
Friends who went into law paid back their loans. Trevett wanted to be a diplomat but wasn't diplomatic enough, tried other jobs, and eventually went back to university, AUT this time, to do journalism.
Unfortunately journalism "pays somewhat less than law". In her first few years as a journalist, paying the extra 12 per cent student loan tax, Trevett "lived from payday to payday".
"You get down to your last four or five days and you have $5 to live off till payday comes," she says.
She woke up at 3am worrying about the letters threatening to cut off the power, and once had to ask her brother to pay her dog registration.
"I actually lost weight because I couldn't afford to eat. I had a dog, and I put his food above mine," she says. "It did motivate me to not want to be poor for my whole life."
After 2006 her loan finally started to dwindle. When she tweeted about paying off the last cent in December 2016, she received a congratulatory certificate from Steven Joyce, who was Tertiary Education Minister at the time.
In those last few years she was on the top 33 per cent tax rate, so the extra 12 per cent meant 45c out of every dollar she earned was going out of her wages.
"Then when I paid it off it made a massive difference to the money in my pocket," she says. She finally bought a house this year.
How does she feel about it? She is more bemused than angry, seeing younger students getting their loans interest-free and now fees-free.
"I wasn't necessarily aggrieved about having to take out a loan. I was more aggrieved when they brought in interest-free and I realised how lucky those people had it," she says.
"It's a generational wedge. I kind of went there and I can't stand someone moaning about student loans. I just sit there and think, 'You don't know how lucky you are, stop your bleating!'"
• Today: How student loans have defined a generation.
• Tomorrow: Was the debt worth it?
• Wednesday: Will today’s students be any better off?
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