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Student allowance cuts – making a bad policy even worse

Holly Walker MP
Holly Walker MP
holly [dot] walker [at] parliament [dot] govt [dot] nz (Email)

Postgrads, if you thought you were ok for student allowance next year because your course already started, think again…

At the time of the Budget in May, Tertiary Education Minister Steven Joyce announced that postgraduate students would no longer be eligible for a student allowance.

In itself, this policy is short-sighted, flies in the face of Government plans to rein in student debt and will further impact on diversity as the prospect of taking on more debt will limit those approaching postgraduate study.

What’s now become clear, and makes this bad policy even worse, is that many students who had thought they were exempted from this cut are now realising that they are no longer eligible as well.

Have a look at the TV3 story on this from the weekend.

These are students who are part-way through postgraduate qualifications (e.g. have completed one year of a two year Masters course) and are now looking to re-apply for their allowance for next year.

The reason that they thought they were exempt was because of misleading statements like the one below from Steven Joyce from back in May:

“students who apply for student allowances in 2013 for an enrolment period that started in 2012 will not be affected”.

Instead, these students are now being told by Studylink that they are not eligible for an allowance to complete their study. While there is the option to increase their student loan by borrowing living costs, this is about $70 a week less than what is available through the student allowance.

As well as the disincentive of further adding to their debt, for many of these students they will be unable to survive on living costs alone, yet do not have the time to work as well as complete their course of study.

This is leaving many of these students with little option other than to drop out.

What is most frustrating is that many of the students affected by this policy are those studying towards qualifications that are specified on the list of skills shortage in New Zealand so there should be every incentive there for our young people to be exploring these fields of study.

For example, we have an ‘absolute skill shortage’ of Clinical Psychologists and it’s the sort of qualification where a postgraduate qualification is required. It’s also the sort of qualification where you’re required to work full-time four days a week as an intern (generally unpaid), attend one full day of class each week and then also complete assignments, exams, etc., so there is little time to take on any extra paid work to supplement the living costs.

This really does show the illogical nature of this policy.

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