Student Allowances!

by / October 13, 2008

Helen Clark just announced that if elected it would phase in a universal student allowance.

There would be a total cost of $210 million a year when the plan is fully implemented. It will take four years to roll out.

The plan removes Means Testing of parental income up to the age of 25 for the student

This spells good news for prospective tertiary students over the next few years. This means students will no longer have to borrow large amounts of money to live. Student debt reached $10 billion earlier this year. The move to introduce this will mean the majority of students will walk away from degrees without crippling debt. This move will also hopefully ensure better quality of learning at tertiary providers with the burdon of having to work 12 – 20 hours a week lifted for many over stressed students.

However concerns have been raised by some students about the viability of this plan.

An Auckland University student said: ” GODDAMN DON’T FUCK UP OUR COUNTRY YOU FUCKS. They’re not getting my vote anymore.

“We can’t afford universal student allowances. People are just going to freeload like crazy. Our lectures will be filled with idiots.”

Last month Victoria University’s Pat Walsh argued that the money from any possible universal student allowance could be better used to improve the universities themselves.

This move to curry favour with students is a triennial favourite of Labour’s. Last election they announced the removal of interest off student loans for all people still living and working in NZ.

Student protesters be worried. Soon there will be nothing left for you to protest about.

About the Author ()

The editor of this fine rag for 2009.

Comments (49)

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  1. Jackson Wood says:

    Re-reading this… that big paragraph makes no sense… but you might be able to make out what I mean…

  2. Check out this Dangers of Debt contest from Consumers Union (the non-profit publisher of Consumer Reports magazine). http://www.creditcardreform.org/contest/

  3. Johnny Vegas says:

    It’s funny how it was marketed to students, when its likely 95% of the students will leave uni with the debt of student loans and then will have to PAY through their taxes for the students who will benefit from this once it completely phases in (most of these students who benefit will be those who aren’t able to vote this election).

    If anything this policy only has negative impacts for most students studying right now. I think National are a bunch of fools, but this ‘bribe’ aimed at ‘students’ only makes me balk at any thought of voting labour.(Not looking at long term here in regards to social changes etc, I’m only looking at the dollars right now)

  4. Naly D says:

    Jackson, I think you’ve left out some crucial information regarding ‘phasing in’ :)

  5. Jackson Wood says:

    Thanks Naly. I wrote about it when I first heard about it. Which was before the full story came out thru NZPA. Feel free to add any info that I have missed.

  6. Stinky McPoos says:

    It should be merit based. This policy makes it too easy for people to abuse the system. You should get your ‘allowance’ taken off your student loan at the end of study if you pass your degree with good marks. Otherwise people will just study for the money.

  7. Exxxxcellent says:

    my lectures are already filled with idiots

  8. dave says:

    This spells good news for prospective tertiary students over the next few years. This means students will no longer have to borrow large amounts of money to live.
    So they live on a student allowance, work and get the maximum. On today’s costs they cant earn more than $370 a week and get the allowance. If they earn about $260 a week the allowance is just $60.00.

    If their weekly expenses are more than $310 and they have earnings of $200 a week they wont be getting getting student allowance abatement of $105 odd even if they qualify as it wont pay the bills – they`ll be getting a loan of $150 a week.

    good news- yeah right – Salient sucked in again.

  9. Michael Oliver says:

    Dave wraggling his arms around in the air screaming “YO SALIENT YO GOT SUCKED IN! DAAAAAMN, FOOL! YA’LL THINK A PLAYA HATER LIKE HELEN GIVES AN 899 ‘BOUT THE STUDENT HOOD? YO A DAMN FOOL, SALIENT. A DAMN FOOL.”

    Why are NZ political bloggers so bad?

  10. Simple Jack says:

    Dave you knob. What student earns over $370 a week??
    And why the fuck would a student need to spend $310 a week?
    Go back to the old folks’ home

  11. Merlin Kaggs says:

    Another cynical election bribe by Auntie Helen. With the polls closing up expect to see it to work again…

  12. youaretheonlyonesmokingthiscigarette says:

    ye-yah

  13. Jackson Wood says:

    Dave: The average rent price for a student in Wellington is between $120 and $140 + $25 – $35 a week for internet, power and phone. If you shop as a flat it should be $40 a week for food. Then you have ‘incidentals’ of about $50.

    You don’t mention the Accommodation supplement for Wellingtonian students receive if they’re eligible for the allowance. This is about $40.

    If a student were to be getting $190 as a student allowance + $40 for the accommodation supplement a week. that would mean that they don’t have to work or borrow to pay for the necessities: Rent, food and power.

    What is not a good deal about that?

    Good news – yeah right – Dave Crampton sucks again.

  14. dave says:

    What is not a good deal about that?
    It would be an OK deal if you got your supplement amount correct. $190 student allowance INCLUDEDS the accommodation supplement for 18-24 year olds. You’ve added it on twice. Have you got the shakes when using your calculator to add $40?

    Using your figures, if rent is $130 ( average, not highest) , $35 a week for internet, power and phone. ( I`m a student and my internet, power and phone is more than that ) and $40 a week for food and incidentals of $50 that totals $265.00

    Your figures show rent/food/power – including phone and internet – is $205. That’s more than $193.46 student allowance and accommodation. So if you expect people to pay $205 a week plus with $193.46 without working or borrowing you may need to advise how it can be done without a broken calculator or sub- NCEA level 1 maths.

  15. Simple Jack says:

    Guess maths has changed since Dave was at primary school in the 30s

  16. Simple Jack says:

    PS Using your figures, if rent is $130 ( average, not highest) , $35 a week for internet, power and phone. ( I`m a student and my internet, power and phone is more than that ) and $40 a week for food and incidentals of $50 that totals $265.00

    Actually it totals $255.

    And who pays $35 a week for phone, power and internet??

  17. dave says:

    What student earns over $370 a week??
    I did. Last week. I’m a student.

  18. Jackson Wood says:

    Concede that point that I can’t add, you can’t either. But $190 from the government is better than a kick in the shins or having to borrow it. I stand by the fact that any student allowance is good news for students. It will mean less debt for students. It will mean students have to work fewer hours to support themselves during their time at uni.

    May I suggest that you move to another provider, such as Xnet, if you’re paying that much for internetz. You may also want to check your meter or change to ecobulbs, because in 4.5 years in wellington I’ve never paid over $25 a week for phone net and power.

  19. dave says:

    I said $265 because I used the base rent of $140 then reduced to $130 ( to be kind to poor Jackson) but didn’t reduce the total thats all… point taken. Still cant pay $205 with $193.46 though…

  20. dave says:

    What’s your point Dave?

  21. Jackson Wood says:

    $205 – 193.46 = $11.54

    Less than 2 hours work at minimum wage after tax. Rather than 10 – 20 hours work if they had to borrow $150… that is still a pretty freaking sweet deal.

    No system proposed by any party yet is going to be the ultimate answer. This triennial pandering to students is not the answer either. However lifting the burdon of debt from students, by making it so that students don’t have to borrow (so much) or work (so much) is definetly a step in the right direction. I means less debt. It means grads can go into paid employment in NZ earling tax revenue for the government, rather than running overseas to either escape or pay it back faster.
    The package annouced by Labour is a stepping stone. It is not supposed to be a cure (shit, I sound like a Labour hack).

    I just don’t see what your point was Dave…

  22. dave says:

    Actually, Jackson, here’s a better example of why this policy is pretty bad

    If a student earns $250.00 a week gross they get a $88.00 abated allowance and $40.00 accommodation supplement, totalling $329.00 net . If they get the Student loan and a WINZ accommodation supplement with their earnings, they get $460.00 which they`ll do if their expenses are more than $330.00 a week including what you call incidentals. The low income WINZ supplement could be up to $60.00 – or more if they have a mortgage. So, the allowance option is $329.00, the loans option is $460.00. Better to live on $360.00, get a loan and save $100.00 a week, accumulate interest and pay it all back once finished studying and if National gets in you`ll get a 10% discount on your lump sum loan payment.

    and nobody can live $190 a week if their rent is $140.00 and food is $30.00 nd power is $30.00 so hardly anyone is going to have the full benefit of Labour’s policy, even in 2012 when rents will be about $200 a week.

  23. dave says:

    My original point was that your example was crap. You maintained that students wouldn’t have to work or borrow – now you say they have to work for two hours? Make up your mind, boy. Next you`ll be saying they should work, take up a loan and save some of it instead of getting an allowance..

  24. Simple Jack says:

    Someone a bit sad they got bummed out about their addition skills?

    I said who pays $35 a week, not how much do you earn, Dave.

    How about you take out a big fat loan, and every other student can have an allowance? Happy?

  25. dave says:

    I said who pays $35 a week
    I do that too, that’s why I had to earn $370 last week :-)

  26. Jackson Wood says:

    I originally said “students wouldn’t have to “borrow large amounts of money to live”. Most people borrow more on living costs than on actual course fees. Student allowence = less money students have to borrow to live.

    The argument started off with you saying that it is not good news. How is less debt, needing to work less, and maybe if students are lucky not working at all (say if they live in a cheapish flat, chose a good ISP, and don’t leave their fan heater on all year round) not good news? The issue became confused because of your numbers. I got the figures wrong… meh… I’ve never been fantastic at adding, that’s why I have people like you check.

    Fuck it. I don’t care. I was just trying to put up the story before stuff.co.nz put it up… I think i got there like a few minutes before.

  27. dave says:

    Dave sucks. My student loan would be half what it is if I didn’t have to borrow $150 a week to get buy. And I worked the whole time.

  28. dave says:

    Freudian slip. “get by” not “get buy”.

  29. Michael says:

    Considering that the majority of my student debt was from living costs, I’m damned pleased about the policy. It may not benefit me, but it’ll help stop others from getting into my position. The whole parental means testing thing was completely ridiculous, as was the assumption that people are likely to be getting income from their parents until the age of 25. I think its about bloody time we have a universal or near-universal student allowance.

    As for being enough money to live… I live on an allowance now, in a flat that is more expensive than the average (and with fewer flatmates than the average, meaning higher phone/internet/power costs), and live perfectly comfortably. I don’t have a huge amount of luxuries but… who gives a fuck? I’m a student, I shouldn’t expect to live like a king. Basically, if you can’t live on a student allowance in Wellington you’re a retard, and I have no idea what you’re spending your money on.

  30. jacksun fan says:

    daves argument is basically:
    The student allowance is shit because – LOOK AT ME! I EARN SOOOOOOO MUCH MONEY EVERY WEEK -and that if you are were earning as much as I do because I earn so much then you wouldn;t get the allowance or at least you wouldn’t get the full allowance. Therefore rendering the entire scheme useless because even though I’m like 60 years old, can’t express my ideas clearly in writing, I am still a student, evn though I’m earning so much money and I’m so extravagent with that money that I go around spending it all on internet power and phone.

    jacksons arguement is basically:
    Its “good news” for students. That most students will come out of the student loan scheme owing considerably less than todays studetns because they won’t have to borrow to live. He got confused with the numbers but the original intent of is argument remained in tact.

    Dave you are greedy. If you’re earning so much money why do you even care? Why aren’t you at the high rollers table blowing it all. Your argument is that you want want want. No one likes a spoiled child

    Jackson,for christs sake please learn to count properly before you assume the reigns as editor.

  31. I think Michael makes an excellent point here – the policy might not benefit us directly, but it’ll help out a lot of other people. That’s kind of the whole point of citizenship, really: we look after others with the expectation that we will also be looked after. For Johnny Vegas to rail against the idea of stewardship is really a bit naive.

    I don’t doubt for a moment that this is an election ‘bribe’; I do however have every confidence that Labour have carefully costed it and have been sitting on it for some time. I’d even go so far as to say it might be a sensible policy in the current economic climate to protect young people from accelerating debt – for all the middle classes’ ranting about blocks of cheese, they don’t have to actually borrow their cheese-pension from the Government.

    Dave: It’s interesting that you mention National’s lump sum incentive – a friend and I actually did the number-crunching when the policy was first announced, and we actually found the incentive was worth bugger-all in real terms (less than $700 on a $28k loan). The full story is here if you’re interested:
    http://www.usu.co.nz/inunison/features/cover-story/humbug-why-slacking-on-your-student-loan-is-saving-you-money/

  32. dave says:

    Jacksun fan, its “reins, not “reigns” Jackson is not King. And did I say I earned $370 every week. Oh that’s right, I didn’t. Im not going to benefit from Labour’s policy as I wont be a student in 2012. Neither will most current students, I suspect. So what. And Jackson, if you go to Education counts and read the reports you`l find that most people who get student allowance get less in living costs than what they pay in course fees and books – and if you get the student loan for living costs for 30 weeks you`ll get exactly the same amount you spend on course fees if you spend $500 on books, travel etc.

    And Rory, your example of the repayment incentive from National is pathetic – what worker pays off their 28k loan at average of $3 a day in lump sums to get such an incentive – even at 30k. that`ll take more than 20 years to pay. And to have a student loan that size the average student – at least aged 18-24 – will have to get more in living costs that in course fees and books.

    Most responsible students who take out loans for course fees and books dont take out loans for full living costs.

  33. Laura McQuillan says:

    Yes, I agree that a universal student allowance is terrible. The government should not be supporting students. They should have to starve, or work in sweat shops.

  34. Dave: “if you get the student loan for living costs for 30 weeks you`ll get exactly the same amount you spend on course fees if you spend $500 on books, travel etc.”

    Me: “…What?”

    Seriously though…
    “Most responsible students who take out loans for course fees and books dont take out loans for full living costs.”

    Responsible or not, many students don’t have a choice. Fulltime study has an opportunity cost – you can’t be earning cash if you’re in a lecture theatre. But there’s more to it than that. If, like two-thirds of students today, you’re ineligible for the allowance because of parental means testing you’re probably looking at borrowing between $100-$150 per week (depending on how desperate you are). That still works out at -$4500 per year plus your tuition fees, which is a pretty significant chunk. Now you can bet your arse that $4.5K is not going to be enough to feed, clothe and house yourself for an entire year. Looks like you need a job, but we already discussed the opportunity cost of fulltime study – you need that sweet, sweet moolah, but you don’t actually have the time to earn it. Hello, credit cards and overdrafts!

    So the real situation, Dave, is that most students are still going to have to borrow to live even with a universal allowance. What Labour is proposing, however, will reduce the overall amount of debt and therefore make it much, much easier to pay back. I don’t see how you can possibly object to this.

    P.S. The argument we put forth in that article is that minimum loan repayments are savvy because there’s no interest to counter the effects of inflation. The longer you leave it, the less you have to pay in real terms. Kapeesh?

  35. dave says:

    If you get the student loan for living costs for 30 weeks you`ll get exactly the same amount you spend on course fees if you spend $500 on books, travel etc.”Me: “…What?”</i?
    meaning
    $500 a paper x 8= $4000 + $500 = $4500.
    150x 30=4500.
    That’s what.

  36. Jackson Wood says:

    “Most responsible students who take out loans for course fees and books dont take out loans for full living costs.”

    In 2004 over half the students who also got a loan for course fees also got the living costs. In the business year ending June 2007 156,236 students took out loans for their course fees, 80,921 got the living costs. Looks like a majority of students are irresponsible Dave.

    Thanks Rory. As I said in the original article:

    “This spells good news for prospective tertiary students over the next few years. This means students will no longer have to borrow large amounts of money to live… this will mean the majority of students will walk away from degrees without crippling debt.”

    It is good news. In 4 years time (if Labour’s bribes work) students will be:
    a) borrowing LESS.
    b) The majority of students will walk away without CRIPPLING debt.

  37. Laura McQuillan says:

    Well, no dave. You phrased it as though if you get $150 a week for 30 weeks and spend $500 on books and travel, you’ll somehow get (giveaway, perhaps) your course fees paid.

    Try to use punctuation and some conjoining words for clarity.

    B-

  38. Mr Magoo says:

    Hold on, I’m lost.

    Dave, what’s your point?

  39. So what you’re saying then is that half of this hypothetical student loan is actually generated by living costs?

    I’m pretty sure that demolishes your entire argument.

  40. dave says:

    What’s my point?

  41. risky says:

    ok this entire thing has turned into attacks on personality not merit
    dave seems to be thinking very clearly (apart from maths)
    but he is attacked because he earns to much money ?
    the following statment is an absolute joke
    or the writer lives in a cave huddled over a candle for heat
    or they are as stupid as their ecobulb suggestion
    “May I suggest that you move to another provider, such as Xnet, if you’re paying that much for internetz. You may also want to check your meter or change to ecobulbs, because in 4.5 years in wellington I’ve never paid over $25 a week for phone net and power.”

  42. Mr Magoo says:

    Yeah I agree Dave’s arguments are good. Especially the whole ‘giving students extra support is a bad idea’ one. I agree with McQuillan that students should work in sweat shops! I need some new sneakers.

  43. Jackson Wood says:

    risky: you’ve obviously never been involved in a Salient blog debate. They’re all fun and games. Nobody really takes this seriously. I don’t live in a cave either. If I did, I would probably spend more on heating. Caves are not very efficient. I’d also need to get the cave wired for Broadband which costs about $175. Although these costs would be offset by the fact that I didn’t have to pay rent. Which would be pretty sweet.

    It would also have been pretty sweet if I didn’t have to borrow $150 a week and work to support myself while I studied. Thank god the students in four years time might have an opportunity to not come out of their degrees stressed out and up to their eyeballs in debt. Although I don’t agree entirely with Labour’s plans, and the cynical nature in which they introduced their policy, it is another step in the right direction. What student (other than perhaps Actoids and Dave) are going to refuse money from the government? What student is not going to say it is good news.

  44. Michael Oliver says:

    You’re out of control, Dave.

  45. dave says:

    You mean like U2, or Chemical Bros?

  46. Jackson Wood says:

    No. Like the sitcom. Cut–it–out!

  47. Johnny Vegas says:

    “That’s kind of the whole point of citizenship, really: we look after others with the expectation that we will also be looked after. For Johnny Vegas to rail against the idea of stewardship is really a bit naive.”

    My ‘disclaimer’ in my previous post:

    “(Not looking at long term here in regards to social changes etc, I’m only looking at the dollars right now)”

    I am well aware of the potential benefits (and possible negatives) of this student allowances plan in the future. That still doesn’t take the disappointment away from having to contribute for someone elses way through university after not receiving such a benefit yourself. I’ll accept it sure, because in the end it is on first appearances a very good thing, but it’s not going to stop me thinking “why wasn’t this pushed out sooner?”. Selfish? with a 20k debt on my shoulders and counting, balanced on study and a part time job, I’d like to think I’m allowed to be alittle bitter about how much easier later students are going to have it. It seems like a fairly common type of response. Nothing is stopping me from overseas though once I’m done =)

    “That’s kind of the whole point of citizenship, really: we look after others with the expectation that we will also be looked after”

    Generally stable, but it might be seen to be naive with some governments in the past. Great expectations. Passive results.

  48. Naly D says:

    Dave you knob. What student earns over $370 a week??
    And why the fuck would a student need to spend $310 a week?
    Go back to the old folks’ home

    I earn over $370 per week and study full time. :)
    I also spend more than $310pw.

  49. Laura McQuillan says:

    What do you spend it on?