Labour pledges to cancel 10% of eligible student loan balances

Labour unveiled a student-loan relief package at its campaign launch in Manukau, promising to cancel 10% of eligible balances for New Zealand-tax-resident graduates who did not receive the fees-free scheme. Loans of $2,000 or less would be wiped out entirely, and larger debts would be reduced by a tenth, with an estimated five-year cost of $583.4 million, largely incurred in the first year when historic fees are forgiven on 1 April 2027.

The scheme applies only to students who have finished their studies and still owe money. Party leader Chris Hipkins argued the initiative will give borrowers more capacity to save for homes, start families or launch businesses. Tertiary education spokesperson Shanan Halbert added that graduates have earned their qualifications and should not spend years watching loan balances stagnate. The proposal is part of Labour’s broader election platform aimed at retaining skilled workers such as nurses, electricians and social workers in the country.