Labour Promises Student Allowances

Last Monday, Helen Clark talked to the students at Otago University and promised that the Labour government would pay all university students an allowance in the future. It would happen over the next four years.

In the past, students at university received a small bursary to study. This was stopped in the early 1990s but students under 25 years old whose parents earn less than $46,000 can receive an allowance. At the moment, this is $122 a week if they live at home and $153 if they live away from home. New Zealand students do not usually like living at home after their teenage years. Students over the age of 25 can receive an allowance of $184, but most students have finished their study by that age. Only about one third of students receive an allowance.

This means that two thirds of students pay for themselves while studying at university and most of them borrow money for fees and living expenses. Fees for full-time students are around $4,000 a year. On top of this they need money for text books, field trips, rent, food, transport and other expenses. The average student debt is around $30,000 by the time they finish their degree. While some students have financial help from their parents, 90% of full-time students do some paid work during the academic year. Of course this makes it difficult for students to study when they have to spend time working.

One of the biggest problems for students when they graduate is the debt. How can they get married, have children and buy a home when they still have a large debt to pay back? Many graduates go overseas to Australia and the UK because they can earn more money there and pay back the debt faster. If they decide to live overseas permanently, we call this the ‘brain drain’ – we lose our clever people. We are short of doctors, nurses, teachers and engineers.

Bill English of the National Party asked where the money is going to come from. He said there is not enough money to pay the $210 million per year it will cost. The Vice-Chancellors of New Zealand universities said it would be a better idea to spend that money on the universities because they are short of funds.