Earlier in the year the Prime Minister said the government was going to rein in the student loan scheme “big time”. He refused to say what this specifically meant, but it is clear the government has plans. Having decided that they can’t do what they really want to do in terms of getting rid of the interest free part of the scheme they have made a number of changes to limit eligibility, such as stopping those 55 and over borrowing for the living costs portion of the loan.
But there is more to come. In answer to a written question I put in about reports that the Minister of Tertiary Education had received about changes to student support, came this answer from Steven Joyce.
I have received many reports and briefings regarding future student support arrangements since 1 August 2011, if the Member would care to be more specific I will endeavor to provide a response. However, the Member should note that many of these will relate to future Budget decisions and therefore will not be released prior to Budget day.
So students can expect changes to be announced on Budget Day. Rumours abound as to what the changes will be. I have heard talk of major changes around allowances that would effectively wipe them out in favour of loans. This would be hugely controversial and create major equity issues. Moreover it would have the effect of massively increasing the student loan balance which would seem to be the opposite of the government’s policy objective.
More likely is an implementation of National’s election manifesto statement about student loans that
Ensure students who borrow from the scheme are working towards qualifications that can attract an income that allows them to pay back the loan.
This relates to the already announced plans to publish the salaries of people with particular qualifications. It raises huge concerns. What courses will not be eligible for student loans? What time scale will be used to identify the income? Will other factors will be taken into account to assess the value of a course?
I am all for ensuring that tertiary education plays a major part in providing the skilled workforce that we need. I also think we need to keep a careful eye on the quality of courses, but that is not the same as saying students can only borrow for courses that attract a particular income. The salaries earned by graduates are not the be all and end all of the value of tertiary education. Bob Jones famously once said he would rather employ an arts graduate than a commerce graduate because they had been taught to think.
We need to have a wider view of the value of tertiary educaiton, firstly for the individuals concerned and what they learn, but also for society as a whole of having people who have undertaken a range of courses. We want musicians, designers, artists or whatever it might be that the Minister considers is not earning enough, don’t we? They might not have huge financial benefit, but they are important in a civilised society.
Budget Day could be very interesting, and possibly disturbing ifor students and future students.
Ominous: “Ensure students who borrow from the scheme are working towards qualifications that can attract an income that allows them to pay back the loan.”
So that would wipe out most of BAs.
Bob Jones once said that the only University qualification that he was interested in with a prospective employee, was one in Philosophy.
Universities could just turn into Technical Colleges. And forget all that stuff about education people to think better.
What would be the University qualification for an MP?
Doctor of Spin perhaps?
Keep the heat on them Grant! As if things aren’t tough enough already for the younger generation trying to become better educated. Slapping living costs on the never never, further incentives the tertiary qualified to leave this Country for greener pastures abroad. Its ok for the rich elite who can afford to give their children a leg up to study at University, what about the rest who aren’t in a financial position to assist?
Also as it is, most New Zealand Universities are becoming to reliant on foreign students for income. In a lot of cases damping down courses available due to demand/revenue.
Bob Jones also wrote a book Degrees for Everyone that concluded University was a waste of time didn’t he?
Cactus Kate. I think from memory, he said that many subjects were fatuous.
And he also said that a degree in economics or accountancy really screwed up the thinking of prospective employees. He would therefore start with an intelligent person who had an open mind and ability the ability to question and to apply connectivity, and turn them into successful people.
Umm. That is what schools are supposed to do but get sidetracked by the particle nature of NCEA and the distraction of National Standards.
Just thinking that the courses that are difficult to pay back the loans , one could be pilot training.
The cost is extremely high but low income ( initially)
A BA could be paid back even if you were a checkout operator. ( eventually) but on average most would be repayable.
Probably the courses would guided by actual experience, which would point to the pilots.
Ianmac – he was mercilessly taking the piss out of the entire university system. Don’t think he respects any of it.
GWW – given a checkout operator is now one of NZs richest people, you perhaps need new examples.
“What would be the University qualification for an MP?
Doctor of Spin perhaps?” LOL
@Ghost – Yeah, but why should only richies get to be pilots?
Pilots are cool! 
!!!!!
@Cactus – banana republic
!
The rich got richer, thanks to to Labour’s interest free loan bribe. Another policy of unintended consequences like LAQC’s.
If we are going to have interest free loans then we need to have universities where entrance is based on ability. We need to have a Harvard or Oxford type of univeristy here, a university where people aspire to go to and can work hard towards. But this all goes against narrowing the gap of inequality and we will continue to churn out mediocre graduates. Then wonder why they cannot get high paying jobs gripping firmly to a bit of paper with a seal on it.
CK, as noted before your job title was ‘Director’ . It has been noted that Goldman Sachs with 35,000 employees, and has 10,000 with the job title of executive director, 1000 who are managing directors ( or in US parlance Vice President).
It would seem director is just a starter position at Goldman Sachs
One wonders what the pay grade at GS would be for those who ‘shred the paper’.
Wouldn’t a better way be to focus on reducing Student debit by offering a bonding system on certain courses such as Med students, and trades. Free education if you graduate and agree to work in NZ for the next 10 to 20 years.
students under 18 who leave school and then graduate shouldn’t have to pay back living costs if they can’t live at home. And if they are doing a foundations course because High School didn’t work out for them and they graduate the entire lone should also be wiped after all this is more or less the same qualification they would have got at High School and young people should be encouraged to pass.
Yes this will cost money to start with but in the long run the investment will pay off as these people should be work ready when they graduate.
While we will have to wait for the details in the Budget, it seems likely that the ability to pay the loan back could be a deterrent to women, as they typically take longer to pay back loans anyway and its nightmare stuff having to put living allowances on tick. Just seeing the dole queue for young people increasing with this type of change to the scheme.
Heres a radical thought:- Cut out student loans and the government pay the fees, then the money go round would cease. How much is spent administering the idiot scheme.
So whats the answer then? Student loan debt is at what 10 billion plus dollars? Growing by a billion a year? At what point would Labour do something about it? 20 billion, 30? Do we just keep handing out buckets of free cash?
“So whats the answer then?”
If tied to 10 years of service and employment in NZ, free education in the sciences, especially those targeting green technologies.
I’d pay extra to see bright sparks emerge from the gloom of generation x (thanks baby boomers), instead of churning out more lawyers, accountants and bookeepers.
You always get what you pay for, always.
Bob , how is a loan described as ‘free cash’ when you have to pay it back. Do you admit you need a reality check on this.
And we have an incentive to students to stay in NZ, they get an interest free loan, if they maintain the payments.
None of this applies when they go overseas.
And remind me which party introduced student loans, the university fees part which was previously totally paid for by the taxpayer.
Ghost – some competitive wages and a comparable standard of living would be a much better incentive, as would not being constantly expected to prop up a generation that sold the world.
Agreed Dan!
Happy Easter everybody!
!!!!
Dan , I too went to Australia , but it was during the 80′s. When I came back at the end of the decade I got a pay increase working a comparable job in NZ. And that was after living in high wage Melbourne.
Unfortunately , we then had Ruthanasia and a decade of stagnation under National.
As they say its deja vue all over again.
I’m scared Ghost!
!!!!!
!
The country’s going down the toilet!
I have just decided to return to uni as a mature student. My first degree was an arts degree which I found most managers did not value (Bob Jones aside, who does most things contrary to large institutions). I found that I could earn more laboring or in semi skilled positions than in the corporate world where you were still expected to take a lower wage until you had finished a business apprenticeship. Earning more than a checkout operator, I can say that my loan balance did not move until the interest free change, and now I’m free it is time to return.
Also grant it is not only arts. Most of my contemporaries pursed jobs that they were not trained in, excluding professionals, many of whom are now also leaving the profession to purse other careers. Interestingly I was talking to someone at Allied workforce who felt sorry for all the graduates from the pre trade courses who were great laborers but could not get an apprenticeship for their trade.
One thing that struck me as I researched different degrees was just how cheep a law or accounting degree was compared to other scientific based courses. I guess that the science and medicine students are paying more for the lab equipment that Lawyers don’t need.
My conclusion is that you need postgraduate qualifications today or a professional degree that is often protected by registration. As for Lawyers, who in turn become lawmakers, they have added a nice level of regulation to protect their incomes.
For a comparison of those who are more intelligent or make better choices by profession, this has been studied mainly by psychologists. This is framed by ability to find the best most probable outcome given current knowledge. Unsurprisingly Economists come out tops, as a social science this is the pure study of choice, but at lower levels that managers take there is a lot of givens and assumptions made in order to focus on methods. Psychologists came out second, some suggestion that was inevitable as they designed the test, but also they work on probability theory (experimental) and have knowledge of cognitive biases. Statisticians were third, followed by Mathematicians and then other natural scientists. Philosophers surprisingly came out lower than expected, and Engineers were great at evaluating probability of ‘x’ happening but not so ‘x’ +’y’ + ‘z’ + “human error”. Lawyers were great at “proving” a hypothesis. There was more imagination in supporting their point and dismissing other alternative theories. But they were more likely to accept the first suggestion that came along was and less likely to give it up, ie support the client. This made them hopeless at choosing realistically between theories or discovering reality. The only true half & half result studied. Medical doctors had knowledge and intelligence but seemed to suffer under a delusion that because of this knowledge they were immune to bias, and often had complex reasoning to favor intuitive methods where they conflicted with scientific methods (test results). Generals and Judges shared this same intellectual arrogance. Politicians and Company Directors (Big business) just thought they were different (superior/better equipped) to everyone else, especially in the UK with the class system operating and influencing board appointments. Put simply yes they do believe that they are unique and worth every million they get for sending each of their companies bankrupt.
Musicians (followed by other creative artists) not unsurprisingly were more sensitive to the human condition, and were open minded thinkers, (as many topics as you can find in any songs), but often biased to what should be over what is.
Firstly, Nice post.
“Musicians (followed by other creative artists) not unsurprisingly were more sensitive to the human condition, and were open minded thinkers, (as many topics as you can find in any songs), but often biased to what should be over what is.”
Don’t know if it’s bias or passionate conviction, but certainly a shame the art of protest through song can’t find a voice or platform.
Maybe having an iphone is now much more important than what’s actually listened on it.
My son is a University student and does not qualify for a student allowance and hence has to borrow to live. Because I am “rich”, he has to accumulate an enormous amount of debt. I’ll give you this scenario – student 1 has parents who earn too much (lets say between them $100,000) and two other teenage children at home. They cannot help student 1 in any significant way other than the odd ‘bale out’, without getting themselves into debt. Student 2 has parents who earn less and hence he qualifies for a free student allowance. Both students take the same course and graduate . they then get similar jobs paying the same salary. One has $35000 of debt, the other has $15,000 debt. Why do we punish student 2 for his parents income and saddle him with a debt that student 2 does not face? Will Labour pplan to remove this appalling policy and stop punishing the children for the (sins?) of their parents. Why would two students who have the same capacity to earn upon graduation be treated so inconsistently? If the policy is to hurt the sons and daughters of the middle income worker (for reasons that escape most logical thinking people), then it appears to be working.
I must say it’s a bit rich coming from National. Is there great loan scheme not working – are they having the problems they were warned of when they introduced it? My favorite part is the failure of the business schools inside New Zealand universities. So this will be the measure of outcome and quality? – probably. Wow a society of averseness to education and thinking. Who would have thought, and now Labour is so bloody average too.
I am not looking forward to seeing what other changes they can make, to make things even harder.
@Dave,
No it isn’t fair, starting off with that much debt is going to hinder that person. You would have trouble even buying a house if you have so much debt like student loan.
It isn’t fair either that limitations are put on borrowing for course related costs, such as if you are going part time. If you going part time cannot they not just make it half instead of borrowing the whole? It made this year studying very very hard. Text books, supplies, stationary. It all adds up and not everyone is in the position to go full time.
Actually, part time is soon going to be a thing of the past. It brings down the stats of Uni’s and therefore their funding from the govt. Nearly all the part time options are gone already, as are the extamural study in degrees (same reason)
Yeah they are killing off dem loans!
!
Poor A Mother
Public Private Partnerships anyone?