The government is going to change the repayment rate for student loans. At the moment, when graduates earn a minimum of $19,084 a year (that is $367 a week), they have to start repaying the loan at a rate of 10% of their pay until the full loan is paid. This will change to 12% after the Budget at the end of this month. The government said that extra money will add another $60 or $70m to the Education Budget which will be used mostly for Science and Engineering education.
The three-year holiday from repaying a loan for those who go overseas is now only one year. Listen to April 18th 2011 to hear more about student loans.
The government is also planning a reward for graduates who pay back their loans fast. We will have to wait for the Budget on May 24th to hear the details of this.
Another change for students will affect those who come from families on low incomes. If their parents earn less than $55,000, students can apply for an allowance of $6,000 a year. The government says there will be no change for the next four years to that $55,000 maximum income. The other change is that the student allowance will only be for four years. At the moment it is five years.
Vocabulary
repay (v), repayment (n) – pay back money borrowed
The Budget – the government’s spending plan for the year
minimum – lowest number
maximum – highest number
reward – prize
affect – make a difference
allowance – money for living while they are at university. It is not a loan – they do not pay it back.
Grammar
is going to – is planning to, will (‘going to’ is more common for plans)
have to start– ‘have to’ is more common than ‘must’
Almost the whole of Europe (except UK) has free tertiary education. Graduating students are starting their careers debt free which is making their lives much easier. Free universities should be a part of every developed country. It is unfortunate that NZ adopted this very rare system of paid qualification.
The least students can do here is take the little advantage they have with interest free student loans. It won’t make them rich, but they can save some money with it, considering their parents can afford to pay for the Uni even without taking the loans. In this case everyone should still consider taking the loan and use it as leverage to earn some extra interest during the 3 or 4 years while studying.