Minister needs to come clean on plans

Press Release – NZ Union of Students’ Associations

Yesterday’s announcement that the government has frozen the income levels for access to allowances is a concern in itself, but even more worrying has been a series of announcements that the Tertiary Minister Steven Joyce is looking at more wide-ranging …
Minister needs to come clean on plans

Yesterday’s announcement that the government has frozen the income levels for access to allowances is a concern in itself, but even more worrying has been a series of announcements that the Tertiary Minister Steven Joyce is looking at more wide-ranging restrictions on access to student support, based on flawed assumptions, according to NZUSA President Pete Hodkinson.

“The changes announced yesterday will deny an opportunity to even more New Zealand students to get the tertiary qualification that would otherwise help them contribute economically and socially to their country, expand student debt, and increase student poverty. But the veiled threats of greater changes, such as the Minister saying that they are looking at further targeting and John Key’s statement that the government intends to “rein in student loans in a big way”, are even more concerning. The government needs to come clean with its plans,” said NZUSA President Pete Hodkinson.

“Reducing access to allowances just means more students borrowing to live – the only group of New Zealanders for whom this is expected. As student debt approaches $13 billion this is irresponsible: it already shackles students with large repayments on graduation and acts as a drain on their ability to contribute economically.”

“Reducing access to the student loan scheme just means students will be forced to borrow privately, it does nothing to actual levels of student. The US has a privatised debt scheme, with interest. It has reached crisis levels and steps are in place to nationalise and write off great chunks of it, at enormous cost (and private profit to the banks). Why go there?”

“For students aged up to 24, allowances start to be abated if their combined parents’ income is over $55,000. Given that if a student is 18-24 (the ones to whom the policy applies) then it is very likely that parents are both working, $55,000 is only around 60% of the income of two parents on the average wage, and the allowance is fully-abated (no allowance at all) at well below this two working parents average of approximately $94,000. Every student whose allowance is not at the full rate is being expected to borrow to live, as there is no compulsion on parents to support them.”

“There’s clearly a lack of evidenced-based policy being made here, with figures designed to soften up the electorate for further attacks on students. The Minister talks of an $82,000 cut-off rate, which is high for one income but low if compared with two. The Prime Minister talked of a $50,000 loan taking 8 years to repay. This is twice the average graduate debt, but also requires an income of twice the average graduate income. Their figures are wonky. Graduates simply don’t earn as much as the policies being touted seem to assume.”

“There is a major conference to discuss Student Finance in just three weeks, hosted by the Inistitute of Policy Studies at Victoria University of Wellington, and to be attended by officials from across all the relevant Ministries. At least Steven Joyce and John Key could wait for the outcomes of that discussion before they embark on on-the-hoof policy based on flawed assumptions,” concluded Mr Hopkinson.
NZUSA is the national representative body for tertiary students and has been advocating on student issues since 1929.

ENDS

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