Labour mulling scheme to wipe student debt

Graduates who take public sector jobs in the regions could have some of their student loan debt wiped under a new scheme being mulled by Labour.

Labour leader Andrew Little first mooted the idea on Tuesday during an interview with Victoria University's student radio station Salient FM.

Speaking to reporters at parliament on Wednesday, Mr Little said it's something the party is thinking about, but it's not yet a fully formed policy.

He said Labour is "looking for opportunities to at least partially write down student debt using models that the government is already using".

A similar voluntary bonding scheme is already operating in the health sector for graduate doctors, nurses, midwives, dentists and sonographers.

Mr Little said his party isn't going to find a scheme that'll write down all student debt - which totals about $15 billion - but it is looking for practical measures to reduce it.

Prime Minister John Key has dismissed the idea, saying it'll either be unfair or immensely expensive to implement.

He said the government doesn't have any plans for a similar scheme.