Government continues down a path of penalising students

Wednesday, 25 July 2012, 5:48 pm
Press Release: NZUSA

NZUSA Media Release 25 July 2012 (For immediate release)

Government continues down a path of penalising students

Cabinet’s confirmation this week of an increase in the student loan repayment percentage by 20% per dollar destroys the pretence of the government’s public commitment to interest-free loans, and will just put extra pressure on new graduates searching for work in a struggling economy.

Pete Hodkinson, President of the NZ Union of Students’ Associations (NZUSA) said taxpayer investment in tertiary education is taking a U-turn away from supporting students towards penalising students.

“The motivation for introducing this increase in such an arbitrary way, and in the face of opposition from Treasury officials, is nothing more than a move to squeeze more and more money from students in the early stage of pursuing careers in the New Zealand economy,” said Hodkinson.

“Revenue Minister Peter Dunne took great pride this week in announcing that this change will make the student loan scheme stronger and fairer, but what’s fair about a scheme that in international terms is bordering on draconian? More fundamentally this is a scheme that has weighted down our country’s youngest and brightest over the last two decades with levels of debt that are a hidden but major drag on the buoyancy of our economy – and where’s the strength in that?”

“Unlike Australia or the United Kingdom, New Zealand has made the mistake of gearing loan repayments so that they kick in at the incredibly low threshold of annual earnings after $19,084 or more than $367 a week”.

“For a start the threshold should be much higher. We want to see something more geared towards the average wage, or at least 150% of the poverty line (NZ$38,000) which is the yardstick in the USA, or nearer to the UK starting point of £21,000 (NZ$41,000),” said Hodkinson. “In the UK there is also a period of grace before repayments commence. New Zealand students aren’t given any break.”

“All of this makes a mockery of claims that new graduates, committed to furthering their careers in New Zealand and being New Zealand taxpayers, are being given any assistance to reduce their loan debts any quicker. If you’re lucky enough to gain a good job there are no carrots here, only the big stick of having 12 cents from each dollar you earn taken out as an extra tax on your income. ”

“What we’re seeing is a noticeable pattern of wrong-headed decision making that has to be challenged. In areas as diverse as road transport we are seeing sector leaders speaking out this week about decisions where the government is getting it wrong - with the result being ‘serious anomalies and problems’. Wrong decisions and wrong turns in education carry even more serious consequences”.

ends

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NZUSA - New Zealand Union of Students' Associations

We stand for opportunity, for all.

NZUSA is the New Zealand Union of Students' Associations, the national body that represents New Zealand's students' associations and the interests of New Zealand's 400,000 students at universities, polytechnics and in trades training.

We conduct original research, advocate to Government and through the media, and support New Zealand's students' associations to be more effective on behalf of their members. We advocate alongside Te Mana Akonga – The National Māori Students' Association, and Tertiary Women New Zealand – The NZUSA Women's Caucus.

Since 1929, we've believed in a society rich in opportunity, where anyone from anywhere can become any thing. We support accessible, affordable quality public tertiary education.

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