Celebrating student support under LabourTertiary Education
Students have received significant support over the last seven years, which has helped more students than ever before to get a tertiary education, Tertiary Education Minister Michael Cullen said today.
"On 1 April we celebrate an important milestone – one year of interest free student loans. This is saving students thousands of dollars and shaving years off repayment times," said Dr Cullen.
"We have worked hard to reduce the financial burden on students and encourage greater participation across the board," said Dr Cullen. "Tertiary education is more rewarding and less of a burden, benefiting everyone - students, taxpayers, employers and communities."
Dr Cullen's comments follow publication of the latest student loan debt total of $9 billion.
"We shouldn't forget that this is $9 billion of interest free debt – effectively a saving of half a billion dollars a year in interest that would have been paid under the old scheme. On average this represents a saving of just under a thousand dollars for every student every year.
"Students should also remember that the loan debt is increasing because we are making sure more students are getting the tertiary education they need. That's why the number of students has more than doubled since 1994 to over 500,000.
"And tertiary education is a good investment. People who have a bachelors degree or higher qualification earn two and a half times what people with no qualifications earn
"It's good for students, it's vital for the economy. That's why tertiary education is a priority for this government. That's why we have invested so much in making tertiary education more affordable and more accessible. If we are to build a sustainable and innovative economy and so achieve higher living standards we need to raise our skill levels.
"The student support system has been a key part of this. The Labour-led government has:
- stabilised fees
- removed interest on loans while students studied
- scrapped interest altogether from last April
- expanded scholarships for students
- consistently raised living allowances and eligibility.
"According to OECD figures, New Zealand devotes a higher proportion of its tertiary education spending on financial support for students than any other developed country. If you were a student in Australia, the United States or the United Kingdom you would pay far higher fees and face far greater debt to pay for your tertiary education.
"We have achieved much in the last seven years and there is still more to do. We will continue to improve access to allowances. The current reforms of the tertiary funding system will also give students more confidence that the education they are investing in is of high quality and meets their needs.
"Seven years ago students faced spiralling course costs and sharply rising debt. Today, there is no doubt tertiary education is more affordable and more students than ever can access quality training. These are achievements are worth celebrating," Dr Cullen concluded.
- Participation is at its highest ever – the number of students has more than doubled, from 254,000 in 1994 to 504,000 in 2005.
- In 2005, 14.2 per cent of all New Zealanders aged over 15 participated in tertiary education, up from 8.9 per cent in 1994.
- The number of people with bachelor's degrees or higher increased by 142 per cent from 195,000 to 471,000.
- Enrolments by women in public tertiary education providers have increased by 84 per cent.
- Enrolments by Maori and Pasifika peoples have increased by 177 per cent.
- The number of Maori with bachelor degrees or higher has almost doubled since 2001 from 13,347 to 23,070 in 2006
Improved student support
- New Zealand’s public expenditure on tertiary education as a percentage of GDP is high (1.6 per cent, behind only Scandinavian countries and Canada, but ahead of Australia and the UK – 1.1 per cent - and the US – 1.5 per cent - and ahead of the OECD mean – 1.3 per cent). This indicator includes government spending on student support and on funding for tertiary education organisations.
- Improved funding for tertiary organisations and an end to the spiraling fees of the 1990s is reducing the cost of study – in 2000 the average full year full time tuition fee at tertiary institutions was equivalent to nearly six weeks' gross income for a person employed on an average wage. Now it's less than four weeks.
- The government spends $250 million a year on the student loan scheme.
- The median repayment time for student loans is less than seven years.
- The government is changing the rules for borrowers who go overseas – an extended amnesty to next March, a three-year repayment ‘holiday’, fairer repayment rules and lower penalty rates. This aims to ensure graduates are not discouraged from returning to New Zealand to contribute to the economy.
- Improved access to student allowances and support through regular adjustments to thresholds and inflation indexing.
- A new system of scholarships to help those from low income backgrounds and help retain skilled graduates in NZ