Government sends message to graduates – you are better off in Aussie

National’s failure to see tertiary education and training as an investment has been confirmed with the announcement of a 20 per cent increase in student loan repayment rates and reduced eligibility for student allowances, says Labour’s Tertiary Education spokesperson Grant Roberson.

“From the day he became Tertiary Minister in 2010 Steven Joyce has said his policies will ‘dampen demand’ for tertiary education.  He is right- but that is no good thing for New Zealand.  We need more people undertaking tertiary education and training, not less.

“The repayment rate for student loans needs to be a balance between timely repayment and allowing graduates to meet their cost of living.  With Labour’s introduction of interest free student loans pay-back times have reduced while still keeping the repayment rate at 10 per cent,” Grant Robertson said.

“Increasing it to 12 per cent changes that balance and will put graduates - already facing increasing costs of living - under further financial pressure. Graduates are also parents, looking to buy homes and or start families.  This will act as a disincentive for them to stay in New Zealand.

“Student loan repayment starts as soon as someone earns just over $19,000 a year.  This is far lower than Australia where it does not begin until someone is earning around $48,000, and even then only at 4 per cent.

“This announcement will simply make Australia more attractive to our graduates,” Grant Robertson said.

“By freezing the parental income thresholds for student allowances for four years, thousands of people will miss out.  These will be people from households with modest incomes.  For instance a firefighter and a receptionist who currently just fit under the threshold will soon be expected to meet the costs of their child’s tertiary education.  With the rising cost of living, they will not be able to do that.  This means the student concerned will either have to get into debt or not undertake study at all.

“Restricting allowances to only four years of study will discourage people from low and modest income backgrounds from undertaking post graduate study.  This is absurd and a waste of potential.   Does this government really only want people from wealthy backgrounds to undertake postgraduate study?

“The government’s choice of graduates and students and their families as the target to cut costs is strange and wrong.  We must view tertiary education as an investment.

“This government can choose different priorities- like not selling assets or taking on millions of dollars of consultants to restructure the public service. They don’t need to scapegoat people who are just trying to get ahead.

“It’s important that investment is made wisely in quality courses and in students who work hard.  But it is equally important the government does not put up barriers to people achieving their potential and contributing to our economic future,” Grant Robertson said.