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May 30, 2011 | by  | in News |
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Few Students Rejoicing Over Loan Changes

Many Students Are set to lose access to parts of the student loan scheme due to changes made in this year’s Budget.

The 2011 Budget was focussed on cutting debt and re-building Christchurch, meaning many government programmes, including student loans, were adjusted.

A key change means part-time full year students will be unable to receive the $1000 course-related costs component of the loan.

The government justifies this change by stating that part-time students are better able to meet their course costs by working.

There are 98,000 part-time full year students nationwide. In 2009, 24,200 borrowers were in part-time, full-year study and 13,600 of these accessed course-related costs.

One student believes this change goes too far.

“This change seems unfair,” she says. “Surely as part-time students they should get some money, maybe less though, like $500.”

The New Zealand Union of Students’ Associations (NZUSA) also opposes this change.

“We are very angry at the removal of course costs for part time students…For many it will make study just too expensive.” says NZUSA co-president Max Hardy.

Students over the age of 55 will not be able to access the living costs and course-related costs components of the loan from 2013.

In a joint press release with Grey Power, NZUSA stated this change is discriminatory.

“Shutting out older students for no other reason than to cut costs is discriminatory and unfair,” says NZUSA co-President David Do.

“At 55 many students have up to 20 years of work left—that is a hugely valuable contribution to New Zealand,” says Hardy.

Many Victoria students echo this view.

“Just because they are older, it doesn’t mean they can afford to go to uni, it’s expensive” says one.

Repayment thresholds have been frozen at $19,084 until April 2015. This means a graduate will have to begin paying back their loan once earn over this amount.

NZUSA believe this threshold is too harsh, especially compared to Australia’s threshold of $44,912.

The changes also reflect the govern- ment’s goal to encourage students living overseas pay back their loans.
Currently a student can take a loan ‘repayment holiday’ of three years whilst overseas. This has been reduced to one year.

“The change is restricting our right to a kiwi OE,” says one student.

Students who have $500 or more in overdue loan repayments for more than a year will have loan access frozen.
New loan applications must also have a “contact person” to help track down debtors.

Together, these changes will create $450 million in savings over four years. Of these savings, $150 million will be reallocated within the tertiary sector and about $300 million will return to the Government.

Tertiary Education Minister Steven Joyce says the changes will allow more investment in tertiary education.

“The savings from the measures will be used to provide funding for new tertiary education initiatives and investment
in the Government’s other priorities to boost the country’s economic recovery,” he says.

Overall, students appear to be indifferent to the changes. Most spoken to by Salient did not know the changes had occurred. The few who were aware of them were unconcerned because they did not affect them.

Of the few who did care, some were in favour of the changes.

“I think the changes are good if means I won’t get landed with interest,” said one student.

“They are sensible choices that will allow the government to remain solvent and provide student welfare into the future,” said another.

Others were less impressed.

“The government needs to be invest- ing in students to help improve the economy,” says one.

“The government is just playing around with student loans because they don’t like the interest-free scheme,” says another.

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  1. Alun Fosta says:

    I arrived here by a very circuitous route and i won’t bore you with the details. This article is the first that I have read, up to now, and if the quote from it is typical of the thinking and degree of knowledge of law students about government, then heaven help us because whoever said “They are sensible choices that will allow the government to remain solvent and provide student welfare into the future,” said another” certainly won’t.
    The New Zealand Government is NOT solvent, it has been bankrupt since 1933 along with the USA and the rest of the world.
    I suggest that “SALIENT” recommend ALL students to watch “Money As Debt” and “Zeitgeist Addendum” to learn how the debt money;banking scam works and proliferates with the cooperation of the “pollies.”
    I could write a whole lot more but what is the point? I am just a “layman” so what do I know when compared to the academics in their tenured ivory towers propagating the official party line in order to maintain their funding?

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