For those who have not been following the saga. John Key appoints Steven Joyce as Tertiary Minister because there are ‘economic’ issues to deal with in the portfolio including on student loans. Key denies they are making any major changes, but then uses the PMs statement to Parliament to say that they are looking at tightening eligibility to student support, seemingly with time limits and linking to passing courses.
Steven Joyce repeats this in the Press this morning, and makes it clear that National has no real commitment to the interest free student loans policy, saying it was a “political call” to keep it.
But what really gets me about Joyce’s comments is his perpetuating of the myth that interest free student loans mean there is no incentive to pay back the loan.
“The simple point is, if you don’t pay interest on any loan – forget student loans for a second – then there is less incentive to pay it back than if you do pay interest.”
This totally ignores the point that the student loan, unlike any normal loan, is automatically paid back at 10c in the dollar once you earn more than the annually adjusted threshold, currently $19,084. Its not a question of an incentive to pay the loans back as that the law mandates that you do that, essentially as soon as you start working. If we are going to have a loan scheme, that seems to me to be a fair way of paying it back. I suspect Joyce is in fact concerned about the cost to the Crown of the scheme. If so, let’s talk about that, rather than perpetuating myths about how the scheme operates.
The 10c repayment is actually a clear incentive in itself, as once you have repaid the loan you effectively give yourself a pay rise. Of my friends who have repaid their loans entirely having that extra 10c in the dollar has been significant and many have had wee celebrations to get it back!
Ohhh dear, this is going to go down like a cup of cold sick. I hope he realises that if they go through with it, the “brain drain” will skyrocket.
I saw that piece on Closeup that showed the students getting rich off their student loans. Most students don’t do that! Most students struggle to get by.
A time limit effectively jeopardizes the education of people with disabilties, some post grad students and others.
Interest would be a killer, especially on top of the flaming GST !
What do they mean by tightening the eligibility? Surely everyone has the right to get an education. Discriminating against some people is morally wrong.
I wonder if this is part of a National Party plan to soften us up to have CPI interest put back on in the budget? They’ve always hated the interest free loans policy and if the can’t get rid of it, this could be presented as a ‘compromise’ accompanied with appropriate dog-whistles…
I want to know what the time limits are going to be?
I want to know if its worth me continuing studying now or give it up until my children are at school.
Can’t go full time so going part time, due to childcare costs and my degree needs to be finished in 6 years due to the changing nature of my degree so if the time limits are going to be 4yrs or less, means that I can’t do it part time, therfore I might as well give up and start when both children are at school and go full time then (Was going to aim for 5yrs). It will be a waste of money if I continue now if time limits apply, the papers I’d do I wouldn’t be able to be cross credited. Would have to resit them. This would mean I’d be on the DPB until my youngest is 8 instead of 6 so 2 extra years on the DPB.
I swear National has looked into my personal file and based their policies around me personaly as how to best make my life unworkable. As soon as I come up with a plan on how to move forward, they find a way to screw it up and throw a spanner in the works.
They take away the TIA, offering no other way to pay for childcare (500 a year doesn’t cover 100 a week full time after the childcare sub) Then I apply part time at Uni and now that is in question! I work out my budget but then due to everyone struggling including my landlord my rent goes up and power goes up, due to carbon tax, and gst rising, and now I may not have an op to get a decent job by studying?
GRRRRRR!
As for student loans, we pay it back. we can’t get around it. It will mean more NZers going overseas, more personal debt etc. Bad news all around.
@A Mother – Don’t give up your studies, you have a right to pursue them.
Yes spud. In an ideal world. Couldn’t afford to pay once I reach the time limit though. I wouldn’t give it up, just put it off for a few years.
Guess I’m lucky Mother. My loan just stagnated for years, until interest free came in and now its just gone. I don’t know how the kids today cope with a mortgage sized loan that does not pay you back.
My advice to anyone going to study is don’t believe you will get a better job with a better wage when you leave. Most employers will require another two years of low wages as your apprenticeship into the world of business. Anyone looking for money should stick to trades (eg mechanic nurse doctor accountant engineer). University should really be about learning about learning, take a subject you enjoy and learn how to research dissect think and communicate within this subject. Wouldn’t it be nice if the powers that be thought about this.
Look for more stories about students using loans to party, go on holiday or buy guitars, and how we produce too many arts/history students (see point above) and too few engineers. Then the attack is on again, same playbook as last time.
P.S.
I can just see Bill English’s daughter (fantastically talented) use her loan to buy a house on the cheap, and renting it back to the family trust, claiming the allowance, while dad pays the fees, and claims a tax break for the education trust.
So mother don’t spend time worrying how she is going to cope.
Doing early years degree. Will be able to work with and teach children 0-8yrs. Either kindy or early primary school is what I’m wanting to do. Done other jobs, nanny, call centre, retail, office work, data processing but keep getting drawn back to this. Not a snap decision and should be jobs at the end. Even if I have to work in a daycare centre until the position I want comes up or maybe on placements I’ll find that I do want to work in a daycare centre? Who knows.
When I left school at 18, studied to be a nanny, was going to use my british passport (due to my mother born there) work for a while come back and do this degree. Life didn’t pan out that way. Ended up with my childrens father, that lasted 10yrs or so, at 29 I did a few papers to prove could work at that level, got accepted into the degree this year so it is now or never.
I hate paying rent. Would love to own my own home like some of my friends, would mean secuity for myself and my children in the respect no one can tell me I have to move out as they are selling or they need to move in, etc. A permant place.
Oh well.
At least I got in before I they changed the entrance age. Was 20 years to enter Uni, (Didn’t do bursary, did alot of half year subjects as have a phobia of exams and then it was 1 exam pass or fail. Alot better now at college as internal assessments are where some people strength lies)prove you could work at uni level for entry into degrees by doing a few papers. Did that and now they looking at taking away automatic entry. Got in just in time.
I’m glad you got in.
Though I feel for the poor bleeps who now have a snag in their development 
Mother,
Good.
You have obviously had a passion for this job for a long time. I guess you already understand that this is a career with huge satisfaction, but even the owners don’t get ‘rich’.
As for having a house, it all depends on individual circumstances, but it can be closer than you think. Probably not appropriate for this forum to introduce you to all the sprukiers and sharks, but creative terms can overcome lack of deposit or funds. For example have you asked your landlord if they are interested in selling, for a good price they may be able (may not) to provide suitable terms that gives time to get over the bank mortgage hurdle.
Not too much of a worry yet if you read the real estate commentary as we have passed the ‘false dawn’ and prices for the next two years should be creeping down (are now but few people have realized) and the budget can only bring prices down further possibly rents higher.
You may wish to forgo that security until you finish and decide where to live & work, and pocket the lower prices (2 years max).
Yes. Thought long and hard. Not looking to get rich, just to do what I love while having job security. Lol security is a big thing for me.
prob the last suggestion about buying a house. Wait till I’ve finished. Glad the prices are falling. Lets hope they don’t tamper with the loan scheme too much. If interest is put back on it, it will be really hard to get ahead.
Maybe I could move to England and put my citizenship to good use.
I really don’t like how they’re going on about how students are borrowing more and more each year when, had they the chance, the would have the fee maxima policy gone in the blink of an eyelid
As a student I’m scared of this govt.
Hi A Mother,
Have you tried getting a childcare centre to support you in your training (esp one your children could attend)? I’m envisaging some sort of bonding arrangement e.g. you working for them when not at uni (cleaner/office/support worker) and pay including free childcare, centre paying for your papers subject to agreement to work X no. years for them when qualified.
I’m surprised there is not more bonding arrangements for students into business/industry. It’s not hard to pick good students and have a performance-based contract. The cost of uni-papers are a business deductible worth much more to the student than the large business. I’m pretty OT now so I’ll move on….
I know.
I seem to belong to most of this govt hated groups. On the DPB, Student and then going to be a teacher.
I joke about leaving to go to Britian but in reality, I can’t. I’m stuck in NZ. Can’t take my children away from their father and deny them of knowing him. They could grow up resenting me. He would contest me leaving with them anyway.
I would leave otherwise.
As a student I’m scared of what they could do too.
could look at that Linda. Studying from home to keep costs down so travel costs and can work at nights and one day a week. Have put my name down with PORSE to look after children in my own home but as of yet nothing. That is one way of going about it though. Thats an idea worth thinking about.
Now I’m off topic. lol.
Yes Spud I know.
They have metioned a big shake up.
Will just have to wait and see what is announced.
I’m also of the student generation with a stagnating loan that is finally going down because of the interest free loans scheme and it is an incentive to stay here and not pack up and leave. I did 4 years at Otago and got a degree worth nothing in the real world, then 2 years at Vic doing something that was semi valuable but really just common sense, and ended up finally working for a company that is paying for me to do Engineering. Because of my work commitments, I’m doing it part time (read as slow as possible) – I wonder how I’ll be assessed , will I be kicked out because my work commitments and part time professional development taking ‘too long’ mean I’m considered a malingerer? Perhaps I am? It will be interesting..
If they take away the part time option for my degree I would be out. If they bring back TIA which covered childcare I could do it full time. Sill wouldn’t help with the loan though, TIA didn’t cover student loans, which was fair enough.
I wish you people would stop injecting reality into the National Party’s plans
We live in a real world and we are real people, therefore saying how it will affect us in reality is something that naturally happens. No matter how depressing it is, it is reality.