News

A very small cloud looms over students’ futures as the Government considers charging an annual fee to more than 500 000 people with student debt.

The fee is expected to be around $50 a year for every person with outstanding student debt, and will net the Government approximately $15 million.
The proposal comes in the light of an increase in the numbers of students borrowing, up 13 percent from last year. The amount people are borrowing has also increased, by six percent for fees and five percent for living costs. Tertiary Education Minister Steven Joyce said that this growth cannot go on unless policy changes are made; hence the new fee.
Students already pay a $50 fee every year that they borrow to study. This amounts to about $10 million a year, which is only 1/5 of the $50 million administration costs of running the student loan scheme. This fee has been the same since 1992, but is expected to rise to $60.
OUSA President Harriet Geoghegan says that the fee for students with outstanding debts seems reasonable, but is less convinced by the fee for students currently enrolled. “Perhaps if StudyLink sent less letters saying the same thing over and over, they could recover some costs.”
Geoghegan says the move is more a political statement than a policy likely to have much impact in encouraging students to make loan repayments. “We are being guided, like it or not, down a path of universities being elite institutions and fewer people getting degrees. Tertiary education funding needs to become an election issue.”
The proposed loans package includes other tough measures. Students who fail half their courses over two years will be ineligible for a loan. Limits will also be imposed on the number of years a student can borrow; this is likely to be around six or seven years for undergraduate degrees