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Why New Student Loan Rules Aint' Right: Reason 9

MEDIA RELEASE – PTE Budget Policy Awareness Group

27 July 2006

Ten Reasons Why Implementation of the New Student Loan Eligibility Rules Just Ain’t Right (Reason Number 9)

Reason Number Nine: Alignment, Alignment, Alignment

Under the new system TEC subsidies will be “aligned”with student loans and allowances. And “alignment” has been repeatedly touted by Government as the driving rationale and fundamental principle behind the policy change.

So, given the holy importance of alignment to the policy, it seems astonishing the implementation is marred by complete and utter disconnection. No thought was given to aligning TEC funding processes with implementation of the new loans rules. The result is a senseless situation whereby dozens of PTEs will simply be forced to close without an opportunity to adjust to the new rules.

The last TEC funding round was concluded in April. The next TEC funding round is not scheduled until 2007, with funds not available until 2008. Dozens of PTEs therefore face a period of at least 12 months during which students enrolled in their courses will not be eligible for student loans. Students will flee these PTEs on mass, PTEs will go under, hundreds of teaching staff and students will be stranded.

“It is a crazy situation. There is a gaping black hole in the implementation process through which we have been shoved without warning or lifeline. This whole mess could have been averted with just a small dose of commonsense and the alignment of critical timeframes.”

“It was a monumental policy bungle on the part of Wellington that will be paid for in PTE casualties up and down the country,” said Brijesh Sethi, Spokesperson for the PTE Budget Policy Awareness Group.

That is only part of the story.

Reason number ten to follow tomorrow.

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.

The PTE Budget Policy Awareness Group is calling for a fair and reasonable transition period to the new loans and allowances regime.


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