Universal student allowance a Govt pledge?
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A universal student allowance may be one of Labour's pledges in this year's election campaign - at a cost of about $728 million.
The policy would enable about 47,000 fulltime students now ineligible for an allowance to receive taxpayer support and would be the biggest single boost to student incomes since the allowance scheme began.
Tertiary Education Minister Pete Hodgson said yesterday that in January this year he instructed Education Ministry officials to cost a universal student allowance.
But the subsequent paper produced by officials "should not be construed as a signal the Government intends to introduce such a policy".
"The paper was prepared in order to get a better understanding of what the real costs of a universal student allowance would be," he said.
The paper shows that removing income tests on the allowance and providing it to all fulltime students would cost a total of $2.09 billion over four years.
The net extra cost of such a plan is $728 million after the existing costs of the scheme are removed, along with a forecast plunge in borrowing under the student loans scheme that might accompany such a plan.
Students have long campaigned for a universal allowance and such a scheme is party policy for both NZ First and the Greens.
UnitedFuture backs extending allowance payments to all students aged 20 and over.
It is understood Labour has also considered increasing the allowance to as much as $350 a week, but this has been ruled out as too expensive.
A universal allowance would echo Labour's king-hit, interest-free student loans policy in the 2005 election campaign, which was credited with turning around the party's polling and sending thousands of voters to Labour.
Only 57 per cent of students receive the allowance, which is $122 a week for those under 25 and living at home, $153 a week for those living away from home, and $184 for those aged over 25.
That is because the allowance is means-tested on personal income and, for students under 25, their parents' income.
Measures announced in this year's Budget included a 10 per cent increase in the parental income threshold, lowering the age for parental income testing to 24 and increasing the amount students can borrow for living costs from the student loans scheme by $5 to $155.
Under Labour, the number and value of allowances paid to students have continued to fall.
Ministry documents show that since 2001 the number of students eligible for an allowance has plummeted by 32 per cent as parents' incomes have risen sharply, pushing many above the threshold for the allowance.
A study by market researcher TNS Conversa revealed average student debt has risen by 54 per cent since 2004 and is now $28,838.
The ministry says a universal allowance would lead to a substantial reduction in borrowing under the loans scheme.
- © Fairfax NZ News
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I don't enjoy the fact that I work 2 casual jobs a week, luckily get full student allowance at $191 (which is due to the fact that my Dad deliberately made some sacrifices so I could get it) and yes, I do get by, but only by careful budgeting and shared costs between my partner and I.
I don't want to work full time just to get $28k a year at a mediocre job and even if I wanted to, the New Zealand job market is crap! 2 weeks ago, I walked into 10-15 retail stores and applied online for 6 others, followed most up and none of them wanted to know me, despite the fact that I'm a 20 year old 2nd year Communication student with loads of sales and volunteer experience, with a previous diploma under my belt. Likewise with a friend of mine who graduated her Arts degree with honours and worked full time at the Warehouse to get by. Is that right?!
Then you have the poorly run "student owned" (which is actually in affiliation with StudyLink) enterprise named Student Job Search with which I haven't got a single ounce of useful contact from.
As if that ain't enough, there's the over-funded (I know because I unwillingly pay them $100 per semester... so thats, $100 x 40,000 x 2 = $8m) Student Unions who's main purpose of existence is to show the wider community how drunk, how ignorant and naive we students can possibly get, when it's only the 1st year school leaving minority who are photographed at these events, not the people who are actually there to gain a degree. Then you have the universities who are running on breadcrumbs to keep classes running. I currently attend Unitec where they dropped several lectures because of the lack of resources.
Will I be going overseas when I graduate? Well, I wish I didn't have to wait to graduate to go.
I personally think that having a universal student allowance would be a really good idea especially for those of us that arent elligible for one at present and can't exactly ask Mum and Dad for money. I study full time 9-4 5 days a week so it is quite hard to get a job that suits those left over hours and we need a day off. I work one day in the weekend but this still doesnt leave me with any money left over for pleasures like going out. I find that the student living cost is great but we still have to pay that back and considering it doesnt even cover the full cost of rent in a week makes it a little hard on us students. I have always backed labour but having a universal allowance i think will get many more students on board in backing them.
This policy of Prime Minister Helen Clarke's is contemptible. She is trying to buy student's votes. Understandably the bride will appeal to students as it will reduce their debt but by voting for Labour they are condoning there policies. If the Labour Party wins, government bureaucracy will increase; University standards will decline in my opinion, (The head of NZ's top University has openly criticised the Labour Party for this policy because of the lack of funding for Universities.)taxes will remain high, and the government will continue fail to deal with many of the real social problems while tweaking minor issues.
"Do people believe that students only borrow to fund essential study?"
No, sometimes we borrow to eat.
Look, it's not easy to borrow money for anything that doesn't relate directly to your course. You can borrow your fees - that large sum is paid directly to the provider, so you never see it - and up to a grand a year in course-related costs, ie textbooks and such, and up to $150 a week to live provided you don't receive student allowance/earn too much.
You can't borrow money for holidays, cars, clothes, booze. You can barely borrow money for food and bills. The living expenses loan covers my rent and that's it. Sure, I suppose it might be possible to sneak through an Ipod in the guise of "voice recorder" on your course-related costs, but it's very unlikely.
I would say most students not living at home work part-time as it is. We need a universal benefit. It would be nice if the whole thing could go up $20 a week too, but giving it to under-25s is probably more important.
"Once again, the youth, immaturity and self centredness of many students comes to the fore. $728 million. We have an increasingly stressed police forc. Hospital waiting lists are growing and hospitals are understaffed and under funded. Schools have increasing roles resulting in higher pupil per teacher ratios. Aged Care seems to be reaching crisis point. And the economy is heading into a recession with EVERYONE struggling. But that's ok. We don't need to worry about essential services or anyone/thing else. It's far more important to give students $728 million. Because, lets face it, its all about them. Who cares about the rest of the country."
Yes I suppose it's too much to ask to be treated as well as a beneficiary. After all, there are tax cuts to be had! Rich people can get richer here if we just forget about making the worst off slightly better off!
Everyone's struggling here - especially those who are looking at the biggest tax cuts. All those poor people on $90k+ a year, tsk tsk.
Seriously, after saying all that about health and education, I hope you're against tax cuts.
If they do it now i will put my vote for them if not forget it.. Promise Promise... I am currently working full time (40 hrs per week) and doing my degree full time (10 hrs per week not including study time). This is because i am not entitle for student allowance because my parent earn above the trash hole but they dont' give me 5 cents. I think that why students take the first opportunity to leave the country because they don't feel are not appreciated.
Do it now or forget it!!! Just because election year don't just promise.
May be desperate.
But I like it.
Once again, the youth, immaturity and self centredness of many students comes to the fore. $728 million. We have an increasingly stressed police forc. Hospital waiting lists are growing and hospitals are understaffed and under funded. Schools have increasing roles resulting in higher pupil per teacher ratios. Aged Care seems to be reaching crisis point. And the economy is heading into a recession with EVERYONE struggling. But that's ok. We don't need to worry about essential services or anyone/thing else. It's far more important to give students $728 million. Because, lets face it, its all about them. Who cares about the rest of the country.
I personally think that the current system of Student Allowances is very unfair. Getting a Student Allowance that you don't have to pay back should have nothing to do with how much your parents earn. It's stupid how I could go on the dole and do nothing productive with my life, but I can't get a student allowance(not one part of the student loan) cause my parents earn too much.
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And my vote too! As a postgraduate student who rarely drinks and has working through 5 years of university, this couldn't come at a better time. What should NZs future professionals be worrying about, where their next meal or gettting the best out of a university education? Working on minimum wage for 20hrs a week is extremely stressful while studying 40hrs a week. Even if the allowance was $150 a week, that would allow me to work only one job instead of three! What is National going to do for students? nothing? oh yea I thought so.