Now is not the time to stifle students' potential

GRANT ROBERTSON
Last updated 08:45 04/05/2012

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OPINION: United States President Barack Obama appeared last week on a late-night talk show in a regular feature where a news story is set to a soulful beat and generally lampooned.

It is hilarious and very well done, and gave the president the chance to get his point across to a far wider audience.

The topic of the news item was a serious one. It is proposed to double interest rates on student loans in the US. President Obama is leading the opposition with a message that "now is not the time to make school more expensive for our young people".

As Minister of Finance Bill English prepares to finalise the Budget in New Zealand, there are worrying signs that our Government is not heeding that message.

Earlier this year, Prime Minister John Key told a business audience in Auckland that the Government was planning to rein in the student loan scheme "big time".

He immediately ruled out returning interest to student loans, not because he thinks it is a worthwhile policy to keep graduates in New Zealand, but because "it's good politics".

So what does he mean? What has been announced so far indicates that graduates will face a higher rate of repayment on their loans, equating to a pay cut at a time when many are struggling to meet the cost of living.

Setting the repayment rate has to be a balance between paying the loan back in a timely manner and giving graduates the ability to support themselves and their families.

Perhaps more disturbing is the Government's plan to reduce eligibility for student allowances. At present, student allowances are available only to those from low and modest-income families. Reduction of eligibility runs the risk that these people will be forced into debt or will not undertake study or training at all.

Furthermore, Tertiary Education Minister Steven Joyce has said allowances will be limited to four years of study.

This sounds nonsensical. This is saying to people from low or modest income backgrounds that they will not be supported to do post-graduate study. What a wasted investment that would be, to cut someone off from achieving their full potential.

There may be other changes, and some may see funding shifted to other parts of the tertiary sector, but it's clear they will not make tertiary education more affordable. When he first became Tertiary Education Minister, Mr Joyce said the effect of National's policy changes was to "dampen demand" for tertiary education.

That phrase needs careful analysis. Dampening demand mean extinguishing opportunity for some people. It means limiting the ability of some to achieve their potential through tertiary study and training.

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Labour sees the Government's contribution to tertiary education as an investment in our future. We need to make that investment prudently, supporting high-quality courses and hard-working students. But what we must not do is limit people's potential contribution to our society.

We all recognise we are in tight financial times, but students looking to better themselves seem a strange target.

As our economy stagnates and the country looks for a path to sustainable growth, tertiary education lies at the heart of a successful future based on innovation, research and design.

In the last general election, Labour committed to retaining the interest-free student loan scheme. We do want better arrangements for ensuring repayments from those overseas. We also said we would review the impact of the changes National has made, including preventing those over 55 from borrowing for living costs.

We also want to see other important student support policies expanded, including bonded scholarships and the return of support measures, such as the training incentive allowance and post-doctoral fellowships scheme.

President Obama's message applies in New Zealand as much as the US. Now is not the time to make tertiary education more expensive. Now is the time to invest in our future.

Grant Robertson is deputy leader of the Labour Party.

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