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April 7, 2008 | by  | in News |
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Government increases student allowances: “Take that. $9.9 billion of student debt!”

The Government has announced an increase to the student allowance rates, aimed at helping students afford the increased costs of living that New Zealanders currently face.

In a press release from Ruth Dyson, the Minister of Social Development and Employment, it was announced that student allowances and benefits would increase by 3.18% from 1 April 2008, in order to match changes in the cost of living for New Zealanders as measured by the Consumers Price Index.

The increases, which are aimed at “support[ing] vulnerable families and communities”, will reportedly increase the student allowances of around 62,500 students, with an eligible student living away from home receiving an extra $250 per year.

In addition to the increase in student allowances, some of the thresholds relating to student allowances have also changed. The maximum parental income which allows a student to receive a full student allowance has increased by $5441 to $45,744, while graduates can now earn $18,148 before they are required to make repayments towards their student loans, an increase of $364.

VUWSA Welfare Vice-President Melissa Barnard was critical of the depth of the changes, pointing out that while the increases “are obviously good things for the people that are applicable, like students receiving the allowance, parents that are students and graduates… what about the bulk of students that can’t for whatever reason receive these benefits right now?”

Barnard is also sceptical of the timing of the increases, noting that “the only time student debt or the student struggle of getting an education is looked at by the government is… when an election year rolls around.”

Barnard believes that further action should be taken by the government to help reduce student debt, such as increasing the parental income threshold to give more students access to a student allowance, writing off some debt for students staying in New Zealand after graduation and “stopping the university from raising their fees every bloody five seconds”.

The increases are part of an annual adjustment to student allowances and benefits, and allowance rates will continue to be re-evaluated in line with the Consumers Price Index each year.

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  1. Mistake says:

    How exactly does this reduce student debt? The people who get the allowance arent’ borrowing money therefore they aren’t increasing the amount of debt by getting the allowance. Why didn’t the government use the extra money to give an allowance to more students instead of giving more money to the students who already qualify? Then they’d actually be lowering the amount of student debt because fewer people would have to borrow to live.

    And I’m pretty sure that it costs the same to live for a student who gets living costs on the student loan. So why haven’t they raised the amount you can borrow for living costs to meet the current cost of living?

  2. Shaun says:

    Because even with the Allowance, I still have to borrow to cover course costs and other (non-living) costs. With the increase of, say $250. that could be a trimester worth of text books that I no longer have to borrow for, thus my student debt is reduced. While I agree that simply offering more allowances would make a more significant impact then simply increasing current allowances by such a small amount, I just wanted to point out that this action does still reduce debt.

    Oh god my salient commenting virginity has been popped.

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