Abolishing Student Allowances Would Deepen Inequality

Press Release – NZ Union of Students’ Associations

Abolishing Student Allowances would deepen inequality

31 July 2017 – The New Zealand Union of Students’ Associations (NZUSA) is warning that any plan to abolish Student Allowances would deepen inequality, in response to the United Future party’s recent tertiary education policy announcement.

‘We welcome policies which aim to improve access to tertiary education for all, such as the removal of tuition fees, but taking away living allowances from low-income New Zealanders is not the answer,’ says National President Jonathan Gee.

United Future proposes to abolish tuition fees, and in turn abolish Student Allowances to help pay for it. It also proposes to increase the cap on student loan borrowing for living costs with regional variation based on the average rent price in that area.

Gee says ‘while students have told us that their immediate concern is having enough to live on, their long-term concern is graduating with less debt. Linking student loan borrowing to the cost of living, while not addressing the cost of living itself, risks lumping graduates with spiralling and unmanageable debt.’

‘We also know that many low-income families are extremely averse to debt. An indebted future is unlikely to encourage some of our poorest families into tertiary study.’

There is already inequality between student beneficiaries and other beneficiaries. For example, most students are ineligible for the Accommodation Supplement provided for all other low-income New Zealanders, including beneficiaries. Instead, only some students are entitled to the Accommodation Benefit, which is up to $105 per week less than the Accommodation Supplement.

A single person aged under 24, living in Auckland, is eligible for $177.03 per week as a beneficiary or student allowance recipient, plus a maximum of $145 in Accommodation Supplement or $40 in Accommodation Benefit.

‘Where is the incentive to go into tertiary study if it involves forgoing $320 cash from a benefit in exchange for $215 debt from a student loan per week? Tertiary education should be a path out of poverty, not a way into it,’ says Gee.

‘Free tertiary education and a living allowance for low-income New Zealanders who are studying should not be a trade-off.’

NZUSA is the national voice of students in tertiary education. The organisation is owned by students’ associations from universities and polytechnics across the country.

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