14 August 2003 Media Statement

Government launches Step Up scholarships

Around 500 students will be eligible next year for new Step Up tertiary scholarships as part of the government's moves to improve participation by low income people in tertiary education and the retention of skilled graduates in New Zealand.

The bonded scholarships scheme, worth as much as $43,000 over six years for some students, was announced today by Associate Education (Tertiary Education) Minister Steve Maharey and Health Minister Annette King.

Step Up scholarships are being piloted with low-income students studying human and animal health degrees in 2004. Students who receive a scholarship will pay a flat fee of $2000, irrespective of the tuition fee for their chosen course, with the scholarship paying the remainder of normal tuition fees for that course. Scholarships will be awarded for the full duration of the degree programme, subject to satisfactory academic progression. The individual value of the scholarships will depend on the course being undertaken, for example students studying medicine can expect to save around $43,000 in fees over the length of their degree, nursing students $5,500, veterinary students $20,000, midwifery students $5,400 and dentistry students $36,000. Students receiving a Step Up scholarship will be required to remain and work in New Zealand for up to four years after graduation.

It is expected that around 500 scholarships will be awarded in 2004. The exact number will be determined by the cost of the degrees chosen by the successful applicants. Funding of $15.9 million is being invested in the Step Up scholarships pilot over the next four academic (calendar) years.

Steve Maharey said the Step Up scholarships are designed to ensure that people from low-income backgrounds are not deterred by cost from beginning tertiary study and will help to keep skilled graduates in New Zealand contributing to our economy.

"At the last election Labour pledged to introduce bonded scholarships to help address pressing recruitment and retention problems in key occupations. The Step Up scholarships programme will be reviewed in 2004 to ensure that they are meeting these objectives, prior to being expanded beyond the health workforce.

"The Step Up scholarships are also a further step by the government to deliver on our core commitment of lowering the costs of education to students.

"We want to provide additional support to those young and capable students from low income backgrounds who are traditionally under-represented in the fields of human and animal health studies. The scholarships will also contribute to realising the goals in the Tertiary Education Strategy of improving equity of access and opportunity and promoting specialist skills that contribute to New Zealand's development," Steve Maharey said.

Health Minister Annette King said she was particularly pleased that the health sector has been chosen to pilot the Step Up scholarships programme.

"Human and animal health services are vital parts of New Zealand's social and economic infrastructure, and will remain so. Most health professions have been experiencing well-documented shortages of skilled staff. The 500 students trained using these scholarships will help close the skills gap.

"It's clear that students from low-income households are much less likely to study health subjects.

"The Step Up scholarships in health will be available for full-time degree-level tertiary study, lasting three years or more, for specific animal and human health degrees with tuition fees (including compulsory course costs) of more than $3,000 a year. They will be:

- available to those students eligible for a student allowance who are about to leave school or within a year after leaving school; and

- awarded on academic merit grounds.

"These scholarships will result in reduced levels of student debt for health professionals, a factor that has been identified as an important reason New Zealanders head overseas after qualifying," Annette King said.

The Step Up scholarship pilots will be administered by StudyLink. Application forms and information of how to apply will be available in October 2003. Further information on how to apply will be provided at that time.

Q&A

What are the Step Up scholarships?

Step Up scholarships are a new package of scholarships designed to encourage greater participation by capable students from low-income backgrounds in degree-level tertiary study in the areas of human and animal health.

How many scholarships will be on offer?

There will be around 500 scholarships available in 2004. The precise number of scholarships will be determined by the cost of the degrees chosen by the successful applicants.

Why scholarships only in human and animal health?

The fields of animal and human health were chosen for Step Up scholarships because:

- human and animal health are undeniably a high priority area for New Zealand;

- tuition fees for some health-related courses are high relative to other subject areas (up to $10,000 in 2004);

- many health students graduate with very high debts;

- lower-income students (as measured by allowance eligibility) are under-represented; and

- issues around the retention of health graduates in New Zealand are well-documented.

Issues such as entry into retention within the health workforce in New Zealand have, of course, been the subject of considerable thinking and analysis, particularly through Annette King's Health Workforce Advisory Committee.

The Step Up scholarships are being piloted in 2004 - subject to review in 2005, they may be expanded in to other areas. The scholarships are therefore clearly targeted so that success can be properly measured and evaluated, and so that the design of scholarships can then be refined if need be.

What is a Step Up scholarship worth to each scholar?

That depends on the tuition fees (including compulsory course costs) for the scholar's choice of degree-level qualification within the fields of human and animal health.

Scholarship recipients are required to each pay $2,000 a year towards these costs, and the scholarship will pay the rest. The value to the scholar will, therefore, be all the costs in excess of the $2,000 contribution. Given that the Step Up scholarships will only be awarded for degrees costing more than $3,000 a year, the minimum value will be $1,000 a year.

When do they start?

The Step Up scholarship scheme will be piloted from 2004. Each scholarship will be awarded for the full duration of the degree, subject to satisfactory academic progression.

Who is eligible?

To be eligible for consideration under the scholarship scheme, a student must be eligible for a student allowance.

They must also be:

- about to leave school or within a year of leaving school; or

- on an intermediate course of tertiary study (for example, in order to be accepted to study medicine).

Why are the scholarships being piloted?

The scholarships will be reviewed in 2005 in order to consider take-up rates and likely outcomes. It is important that the government ensures that the scholarships achieve the desired outcome and represent value for money.

Can I apply if I study part-time?

No. The scholarships are only available to people who qualify for, apply for, and receive, a student allowance. By targeting full-time study, the Step Up scholarships will ensure that New Zealand gets a quicker return on its co-investment in the scholars' education.

There are other scholarship arrangements that complement the Step Up scholarships. For example, in nursing, the Ministry of Health is funding for 2004 a number of post-graduate level scholarships for nurses in primary healthcare, which will be available either full-time or part-time.

How do I apply?

StudyLink will provide application forms and further information on how to apply in October 2003.

How will the scholarships be awarded?

The scholarships will be awarded to those from the pool of eligible candidates on the basis of a merit criterion during the candidate's final year of compulsory education. The award of the scholarship will be conditional on the offer of a place on a suitable degree-level course. This means that the scholar will need to satisfy the relevant academic entrance requirements.

What courses of study do the scholarships cover?

The scholarships are available in relation to any degree in the fields of human or animal health provided that:

- the tuition costs exceed $3,000 annually;

- the degree-level qualification lasts for at least three years of full-time study

- the degree-level qualification falls within one of the following course classifications:

„« Dentistry

„« Health Sciences

„« Medicine

„« Health-related professions (eg nursing and midwifery)

„« Veterinary

„« Nursing

„« Medical imaging

„« Midwifery (3 year)

„« Occupational therapy

„« Physiotherapy

„« Medical radiation therapy

„« Pharmacy professionals

Can I study alternative or complementary medicine?

No. For the pilot period, the scholarships will be available only for traditional medical, para-medical and veterinary degree-level qualifications. This is because the government considers them to be priority areas for recruitment and retention.

What are the conditions of the scholarships?

The intention is that recipients will be subject to a bonding requirement that the scholar remain in New Zealand following successful completion of the degree-level qualification for a period equal to the length of the study-period or four years (whichever is the lesser). Graduates will be able to take a break of up to a year from this bonding requirement.

What if the bonding requirements are not met?

In cases where scholarship recipients default on their bonding obligation, there is a sliding scale of recovery (shown below). This will be recovered through the Student Loan Scheme. It will be a pre-condition for the award of a scholarship that an account is opened (with zero balance if necessary), and in the case of a scholar defaulting, the amount to be repaid will be transferred to his or her student loan account.

Amount student pays back if default is triggered:

Within 1st year after qualifying Within 2nd year after qualifying Within 3rd year after qualifying Within 4th year after qualifying

Course of 3 years length 80% 60% 40% N/A

Course over 3 years long 80% 70% 60% 40%

Will receiving a scholarship affect the recipient's entitlement to a student allowance or other social assistance programme?

No. The scholarship contributes to the tuition fees costs, while student allowances cover living costs

Will the scholars be able to borrow from the Student Loan Service?

Yes - but not for the proportion of tuition fee costs covered by the Step Up scholarship.

Can recipients receive other awards concurrently with a Step Up scholarship?

Yes, provided that doing so is compatible with the regulations of the other award.

Who will administer the scholarships?

The Step Up scholarships will be administered by the Ministry of Social Development through its StudyLink service.

ENDS

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