Govt may axe funds for elderly

Tough economic times are forcing the Government to consider whether student support payments for people aged over 65 are a sound investment.

Increased demand for tertiary education has meant that in the first three months of this year, Government spending on student allowances was nearly $58 million, compared with $47m in the first three months of last year. The amount given in student loans for fees rose from $500m to $570m.

More than 150 people over 65 received a student allowance during this period and 655 received a student loan. Five people were over 80.

Recent Organisation for Economic Co-operation and Development (OECD) figures showed New Zealand's investment in older students was above its average and support for younger students was below average, Tertiary Education Minister Anne Tolley said.

"I strongly support lifetime learning, but in tough economic times we do have to carefully consider how and where our investment in education is best placed," she said.

"I intend to look into this issue and take advice on it."

A new Ministry of Education report looking at demand for tertiary education showed it would continue to increase as economic conditions worsened and remain at high levels even after unemployment fell.

However, demand was predominantly for low-level courses that would be of little help in pulling New Zealand out of the recession, it said.

"This demand, even if partially met, will work against efforts to increase the number of people with higher-level qualifications, a prerequisite to increase the store of human capital and ultimately improve New Zealand's productivity."

Gareth Kiernan, managing director of economic consultants Infometrics, said the impact of a large rise in spending on student support would be felt for a long time because students did not pay money back until they started working.

He said the over-65s getting loans and allowances for tertiary study were "almost rorting the system" by using it for hobby courses in their retirement.

New Zealand Union of Students' Associations co-president Jordan King said the number of over-65s getting loans and allowances was small and, with an ageing population, the country was going to have to draw on their skills more.

"I think it's fantastic. Just because you reach 65 doesn't mean your ability to give an academic contribution wears off," he said.