10 Reasons Why Student Loan Rules Ain’t Right

MEDIA RELEASE – PTE Budget Policy Awareness Group

18 July 2006

Ten Reasons Why Implementation of the New Student Loan Eligibility Rules Just Ain’t Right (Reason Number 2)

Reason Two – Savings and Logic

It is purported that implementation of the new student loans and eligibility rules in January 2007 will generate savings to the Crown in the order of $20 million in reduced student loans. Papers revealed under the Official Information Act, as reported by Education Review, show it has been assumed that 90% of students currently enrolled in courses not funded by TEC (some 3000 EFTS) would not transfer to an alternative TEC-funded course after introduction of the new rules.

One might well challenge that assumption. However, in a moment of generosity we shall grant the Government’s policy analysts the benefit of the doubt on that one. They can have their $20 million and they can have their 3000 fewer EFTS.

But, we would like to understand just how a policy of reducing costs through eliminating students and trainees contributes to objectives for upskilling our workforce.

“It seems crazy that dozens of PTEs will be forced to close and hundreds of staff left without a job in order that New Zealand can achieve $20 million less learning and 3000 fewer trainees,” said Brijesh Sethi, Spokesperson for the PTE Budget Policy Awareness Group.

The Issue:

Without warning or consultation with the sector, it was announced that only student enrolled in courses funded by the TEC would be eligible for student loans and allowances, and that this new rule would apply from January 2007.

More than 100 PTEs provide courses not funded by TEC. Between 40 and 50 only provide courses not funded by TEC. Many of these PTEs will be forced to close at the end of the year.

ENDS

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