Student Allowances

I was browing around with a vauge feeling that there was something I was going to blog on tonight.

Then I remembered – this.

Student allowances will be limited to four years of study and automatic loan repayments will be bumped up to 12 per cent of income, the Government has announced.

In a pre-Budget announcement, Tertiary Education Minister Steven Joyce has revealed major changes to both the student loan and allowance schemes.

Joyce says the changes will slice $250m off the loan book and create $60m to $70m per annum savings for the Government, which would be re-invested in the tertiary sector.

The changes would be:

– Compulsory student loan repayment rate increased from 10 to 12 per cent.

– Likely cancellation from March next year of National’s loan repayment incentive scheme, which offered a 10 per cent discount on voluntary repayments.

– Four year freeze on the parental income threshold for eligibility to student allowances.

– Allowances for any study over four years cancelled.

Joyce said New Zealand was an “outlier” by international standards in the way that it funded tertiary education. The Government wanted to rebalance spending away from student support and more towards “the actual tertiary space”.

“We’re going to encourage those that have completed their tertiary education to pay off their loan faster to assist those that are coming through next,” he said.

The parental income threshold for allowances had been increasing “rapidly” ahead of the rate of inflation. Freezing the threshold would bring it “back in to balance over time”.

This is very, very wrong.

Why? Because for years, the government did not adjust the thresholds. It was only a few short years ago that the student’s associations woke up and realised that for over a decade, their members were being gradually ripped off, and demanded that allowances caught up.

So for Joyce to now claim that the threshold has been “increasing rapidly”, he’s counting on people not realising that it is in fact catching up on where it should be. That’s a nasty bit of political spin.

Then on the flip side

But the real problem is the cut in student allowance entitlements, from five years to four. This means that students will no longer be able to pursue a double degree or a Masters on a student allowance (it may also mean problems for law students). Unless they have rich parents, of course. So, National is chopping rungs out of the ladder of opportunity, making it more difficult for those at the bottom to access the qualifications needed to better themselves. I guess their rich kids just can’t stand the competition.

Again, most people may not realise that student allowances were only for 5 years. Idiot gets credit for noting that this is merely a decrease of 1 year.

But after that his rant gets farcical. As I mentioned above, threasholds for allowances were eroded over the years. When the government finally stopped this, it was beacuse it was only students who had parents on the poverty line who were able to still get allowances. So anyone with a parent on an average or even slightly below average even, were unable to get allowances.

Strangely during that time, the universities were not emptied of all but a few toffs who spent their spare time talking about their Hawaiian vacations.

The reality is that most students would not even use the 4 years. Yes, this is going to affect masters students, and those who redid their first year and want to do honours. But the reality is that at honours level and above, living costs and tuition costs pale in comparison to the cost of forgoing entering the work force.

But all this means is that people will simply have to loan the money off the student loan scheme.

Which is interest free.

So “will no longer be able to pursue ” actually should read “will no longer be able to pursue without taking out an interest free loan”.

Guess that doesn’t sound quite so dramatic, does it?



  1. Idiot/savant isn’t renowned for letting the truth get in the way of a good anti-National rant. It would be nice to tell him that on his blog, but you’re not allowed to!

    1. Yes. I always consider that comments are important in that they do keep you grounded in reality to some extent.

      So does having a job I suspect.

Comments are closed.

%d bloggers like this: