News

Criticism has continued in response to the changes to the student loan and allowance schemes announced by Tertiary Education Minister Steven Joyce earlier this month.
On May 3, Joyce revealed that student loan and allowances systems would be overhauled in the national budget, to be released on May 24. The major changes include a repayment rate of 12% of earnings over $19,084, higher than the current repayment rate of 10%. This rise is expected to force 500,000 students to pay their loans back more quickly.

In addition, students will now be able to receive the student allowance for 200 weeks only. Currently students are able to receive the allowance for this length of time; however, they are also able to seek an extension for postgraduate study, and this extension is now to be dropped. Because the academic year is 38 weeks, this means that in practice students will be able to receive the allowance for five years of study, not four years as reported by national media and Critic last week. This means students studying for five-year double degrees will remain largely unaffected by the changes. However, students studying for medical or postgraduate degrees will have to turn to student loans once their 200 weeks is up.

New Zealand Medical Students’ Association president Michael Chen-Xu told the New Zealand Herald that the changes to the student allowance would discourage those from poorer backgrounds from taking up medicine. 20-25% of medical students gain entry to medical school after studying for three years, meaning they will see their allowance income cut off before they are even halfway through medical school. When asked for comment, an Otago med student told Critic that “money is hard enough to come by, just to meet living costs; I’ve spent more on textbooks than rent this year. The government is just asking us to go overseas.”

Responding to a question in Parliament last week, Joyce acknowledged 4,000 to 5,000 masters and doctoral students would be affected by the policy change, but noted that “those students will of course remain eligible to borrow from the interest-free student loan scheme.” Joyce then argued that students who gained postgraduate degrees would have the advantage of a higher income when they left tertiary study. Critic speculates that Joyce has clearly not spoken to any holders of philosophy PhDs recently.