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Income Threshold Adjustment Inconsistent

A Government announcement yesterday that income thresholds for student loan repayments and interest write-offs will rise from next April has met with a mixed response from students. Student leaders point out the obvious inconsistency in adjusting the income threshold for student loans, but ignoring the parental income threshold for student allowances.

“The parental income thresholds have not been adjusted since they were introduced in 1992” said the incoming President of the Otago University Students Association, Roz Connelly. “It is unfair to adjust some benefits in line with inflation and not others. Every year the failure to inflation adjust the allowance threshold forces more and more low income students to borrow for their living costs.”

The parental income threshold refers to the level of income a student’s parents can earn before that student is no longer eligible for a student allowance. Currently if a student’s parents’ combined income is over $28,080 the student’s allowance abates. If parental income had been adjusted annually to take into account inflation, the income threshold would now be $32,222.

“Some students will undoubtedly benefit from the adjustment of the loan income threshold. Nevertheless it seems ironic that many students from lower income families are being forced to take student loans, when an adjustment of the parental income threshold would see them receive an allowance” said Ms Connelly.

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