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Student loan access for thousands under threat

26 May 2006

Student loan access for thousands under threat from proposed Budget funding cuts

Thousands of students could lose access to student loans from next January because of a little publicised and 'senseless' Budget initiative, says Education Forum policy advisor Norman LaRocque.

The government plans to stop students from being able to apply for student loans if they study at private training establishments (PTEs) that do not receive government subsidies.

Since 1996, New Zealand students undertaking a New Zealand Qualifications Authority (NZQA) qualification at a PTE, polytechnic or university have had access to student loans to cover fees and living costs. From January 2007, that eligibility will be removed for qualifications that do not receive 'student component funding' (SCF) - government subsidies.

Mr LaRocque said the plan made no sense, disadvantaged students at non-government institutions and was further evidence of the government's anti-private-sector bias.

"It will mean students without the money will not be able to afford some insitutions. Why should students at PTEs be penalised for attending quality assured institutions simply because those institutions are not subsidised through the SCF?

"If students are willing to pay for their own education - without subsidies - why do we then deny them access to student loans to help them finance that investment? The whole point of the student loan scheme is to help students pay for the costs of education up front and repay it once they enter the workforce.

"The government is right to be concerned about quality. But it has well-established mechanisms to ensure quality that operate through the NZQA. Those mechanisms, and not the receipt of tuition subsidies, should be the test of whether students should have access to loans.

"Students at PTEs appear to be being asked to pay the bill for the government's profligate student loan interest write-off policy," Mr LaRocque said.

Information from the Tertiary Education Commission on the topic is at the last bullet point on this web page:


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