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We are being fair to students, says Westpac

We are being fair to students, says Westpac

Westpac is responding to calls for a fairer deal from banks for tertiary students, by pointing out its virtually fee-free Student Pac offers.

Westpac's tertiary segment manager Natalie Davis says the bank is offering students no transaction fees, interest free overdraft, the Debitplus Visa, and a $40 start up deposit in their student account.

The New Zealand Union of Students' Associations (NZUSA) and bank workers' union Finsec have voiced their concerns about students' debt. Westpac itself has just surveyed nearly 600 tertiary students on their worries about surviving the 2008 academic year.

"We know from our own survey that money worries are top of mind for students as they head into this new academic year," says Ms Davis, "and we want to supply them with the tools to keep their debt manageable. We're offering simple, stress-free banking that keeps costs to a minimum and reduces the need for students to get into further debt."

Ms Davis acknowledges the concern the Students' Association and Finsec has over high-interest debt, and says the Debitplus Visa is designed to help students avoid high interest credit cards.

"Debitplus Visa is not a credit card, but it works like one. Linked to a transactional account, it allows the user to make online and phone purchases without the heavy fees or interest rates (currently as high as 21.95%) of credit card ownership."

Westpac also offers a low-interest Mastercard with an interest rate for retail purchases of 13.90%, substantially lower than most credit cards, and with a low limit for students.

"While we offer students the opportunity to borrow from us, we have restricted tiers available to students depending on the year of study they're in: up to $1000 total borrowing in the first year of study and up to $2,000 total borrowing in their second and subsequent years," Ms Davis points out.

"We offer options for students that meet their needs, for example an overdraft facility to help as a buffer between paydays, or a credit card for unexpected costs or flights home. The tiers mean students can access these facilities if they want them but the smaller limits will ensure that any lending they do get from us remains manageable," she says.

Results from the Westpac Tertiary Banking 2008 study, a nationwide survey of nearly 600 tertiary students, show that the majority of students (79 percent), go into the 2008 academic year with the intention of working to cover their living costs, and while some took a 'well deserved break' over the Christmas holidays, just over 60 percent worked during the summer break to pay for tertiary fees and living costs.

Forty-two percent say their primary concerns heading into their 2008 studies are related to financial issues such as the ability to earn and save, accumulating student debt through loans, increase in fees and dissatisfaction with student loans. Other concerns related to academic achievement, balancing study with paid work, finding a job after graduation, and managing their workload.

While a lucky 36 percent are living with parents and not paying any board, 47 percent of students (most of whom were flatting) have to find a way of paying for their considerable accommodation expenses while studying, paid for mostly by student loans or by working.

Ms Davis says Westpac is sympathetic to the plight of students, and endeavours to help as much as possible by having branch staff available to help students with their banking, and by providing online tools such as budget planners and interest calculators.

"Banks are actually doing a lot to give students flexibility. But the real issue for students is that, with student fees and the cost of living soaring, the living allowance and student loans just don't cover all their expenses."


ENDS

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