Allowance cut adds thousands to loan
Caitlin Davies has been forced to add thousands of dollars in student loan debt and take on extra hours of part-time work so that she can finish her masters degree.
Ms Davies, 21, is among thousands of students part way through post-graduate study who will have their student allowance cut off when changes announced in last week's Budget take effect next year.
"They just changed it without telling us and we can't really do anything about it now because we've already started," Ms Davies said.
"If we'd had warning, our decision-making would have been different."
As well as freezing the parental income threshold at which students can claim a student allowance, the Government has also decided allowances will not be available to people in masters or PhD programmes – a move that will cut up to 5000 students from the scheme.
Ms Davies was eligible for the allowance in the first four years of her psychology studies because the income from her mother did not cross the threshold.
She gets about $210 a week, which covers her rent and power bills. She works 10 hours a week as a swimming pool lifeguard to cover other bills, rather than borrow from the student loan scheme for any more than to cover her fees.
Next year, when she writes her thesis, Ms Davies will be cut from the allowance and have to draw further on her student loan for living costs. But living cost loans are currently capped at $172.51 a week so she will have to increase her work hours in order to pay the bills.
Ms Davies said if she had known the Government was going to cut off her allowance, she would have made different plans.
She may have taken a year out just to work or have gone to the United States for her post-graduate study, where she did an exchange earlier.
"If you can apply for a PhD programme in the United States that pays everything for you, why stay here?" Ms Davies said.
Another affected student, Sarah Jane Parton, had planned to continue up-skilling with postgraduate study next year but will now not carry on.
Ms Parton, 32, with two children aged 6 and 3, used the student allowance to go back to university this year for a masters degree.
"To me, it seems like they're relegating higher education to the people who are either independently wealthy or are so bright they can get a scholarship," Ms Parton said.
Labour's tertiary education spokesman, Grant Robertson, said New Zealand "desperately" needed more people to take advanced qualifications to help drive sustainable economic growth.
"Cutting allowances will only jeopardise that," he said.
"This Government needs to get its priorities right, and invest in our future by encouraging students to complete postgraduate study."
Tertiary Education Minister Steven Joyce said post-graduate students affected could borrow from the student loan scheme.
"It's interest-free ... somebody who is going to get a masters or a PhD, the average income premium for them once they graduate from that second degree is between 60 and 70 per cent over somebody who doesn't go to university."
- © Fairfax NZ News
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