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Borrowing For Study - How Does This Effect Women?

An Opinion Piece Dayna Berghan
National Women's Rights Officer
New Zealand University Students Association

The Student Loan Scheme was first introduced in New Zealand in 1992 as part of a major overhaul of the entire tertiary sector (post compulsory study).

Since that time, students have collectively borrowed over $4 billion dollars. Further, government estimates show that over half the students who take out student loans will not have paid them back by the time they are 40, with a further 10% still owing money on their loans at age 65. It is likely that the bulk of these debtors will be women. The 2001 NZUSA statistics project that the time taken for a woman to repay her loan is an average of 27 years, whereas the average time for men is 14 years.. That means it takes a woman on average nearly twice as long as a man to pay back the same amount of debt!

The Student Loan Scheme in a nutshell. Basically, students are able to borrow the cost of their fees, $1,000 "course related costs", $150 per week for the number of weeks in the course to live off and a $50 administration fee. Interest is charged at 7.0% once the student stops studying and repayments start once the borrower begins earning over $15,132 per annum. Sounds simple enough? Well.

Student loans were just part of the massive changes to tertiary education and training in 1990's. All these changes were influenced by the ideology of the "free market", which was intended to open up the education "market" and subject it to the rigours of "supply and demand". This shift in thinking also made education largely a private (rather than public) good, which dictated that education was a matter of economic choice for the individual. The idea behind student loans is that they are an "investment" which students make in their future. You are supposed to get a tertiary education qualification and then get a good job so you can pay back your student loan. It doesn't work that way all the time.

There are three factors which are behind the fact that women will take longer to pay their loans off, and will in fact pay a higher proportion of their income. The first factor is gendered pay practices, which reflect the reality that the value placed on work done by women in New Zealand is not as high as the value placed on work done by men. In 1998, data shows that hourly earnings of women with a tertiary degree was 83% of men's hourly earnings; for women with no qualifications it was 86% of men's hourly earnings.

The other factors are that many women take time out of their careers to raise a family or care for other family members. "Around the Clock" was released a little while ago by the Ministry of Women's Affairs and Statistics New Zealand from the New Zealand time use survey 1998-1999.

The findings reveal that while approximately 60 percent of men's work is paid, almost 70 percent of women's work is unpaid. Unpaid work includes household work, caregiving, purchasing goods and services for households, and voluntary work outside the home. Women spend more time than men on all of these activities, averaging 4.8 hours of unpaid work each day, compared with men's 2.8 hours. Student parents, in particular women through their unpaid work in the home, are supporting their partner's debt servicing, but have no means to service their own. The current form of the Student Loan Scheme does not take these factors into account and as a result perpetuates and exacerbates the inequities that graduate women face.

Overall women will be discouraged from going into further study because of the debt burden. They may even postpone having children. Women may find it even more difficult to get a bank loan for a house (etc) later in life because they will have even less disposable income for a longer period.

The result of this for Maori and Pacific Island women with cultural responsibilities to the family, and on average much lower incomes, will be severe.

So what can be done? If you are a woman going into tertiary education or you are already studying join up at your local Students Association on campus. Many of them have Education Action Groups (EAG). Get angry and demand Free Education, Universal Allowances, No Student Loans, Wipe Student Loan Debt, Free Childcare, Equal Pay and Pay Equity. The national student's union called the New Zealand University Student's Association (NZUSA) has a policy that clearly states that student loans are a barrier to participation in education, and should be replaced by a fully funded tertiary education system. You are not alone. Get angry and fight for the right to study without being crippled by debt just because you are a woman.

Dayna Berghan 2001

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