U.S. Citizens Now Hold About $1.3 Trillion in Student Loan Debt
Every time I read articles about student loans in the USA, the options are always presented as either the current state, or free tuition.Why are interest free student loans never floated as an option? Here in New Zealand, our student loans are provided by the government and are interest free as long as we reside in New Zealand.It means that people who don't do tertiary education, or who do a trade, don't subsidise those who go to university. It also means that there's a disincentive to go to university if you don't need to, which I think is a good thing, however everyone is able to go to university if they want to/need to, without worrying about how it's being paid for.Our student loans are also paid off proportional to our income, I think at a rate of around 8% (and no repayments required if you earn less than $19k per year). This means that you only pay what you can, it's essentially another tax, rather than in the USA where you get people struggling to make payments on their student loan.Obviously, we also have the advantage of cheaper tuition, although it is rising. It costs around NZ$7,000 (~US$5,000) per year to go to university, it's not cheap, but it's not cripplingly expensive.