Student Loan Scheme Act a mixed bag for students & graduates

Student Loan Scheme Act a mixed bag for students and graduates

The cost of study will go up yet again as borrowers are charged new fees in the Student Loan Scheme Act passed under urgency in Parliament today. On the positive side, student representatives will celebrate good administrative changes in the Bill.

“This Bill was intended to improve the administration, efficiency and ease of use of the Student Loan Scheme, however the original draft contained several concerning clauses, particularly those altering repayment obligations from an annual to a pay-period system,” says NZUSA Co-President David Do.

“We were very concerned that a shift to pay-period assessments would negatively affect students who worked a lot during the holidays but as much during the year. They could have a low annual income that was under the current annual repayment threshold, yet be forced to make loan repayments from their holiday work because they have a ‘high’ weekly income of just $367 a week for a short period of time,” said Do.

Consultation and lobbying on the proposed changes took place throughout 2009 and 2010 with the public and NZUSA, resulting in the amendments recommended by the Select Committee.

“We welcome the provision to ensure exemptions are provided for full time full year students and part year full time students. We are pleased that students will now not be penalised for working and saving to support themselves in study,” added Do.

Other changes in the Act, lobbied for by students, include long overdue legislative provision for the electronic management of loans, and for overpayments to be refunded to the borrower (in keeping with other excess repayments).

“Students and graduates will appreciate the ability to get their full student loan details online, without having to switch between different IRD and Studylink systems,” says NZUSA Co-President Max Hardy.

“This is yet another example of successful advocacy on behalf of students and graduates by students’ associations, and is evidence of the positive contribution these organisations make to tertiary policy and the education sector,” says Hardy.

“We do however remain concerned at the new and increased administration fees in the Bill. One would assume that the Bill’s provision for electronic management of loans and improved systems at IRD and Studylink would lead to cost savings to government. In this context, these new fees seem like an unnecessary tax. Disappointingly, they make it harder to pay off a loan and do little to help attack the growing mountain of student debt, due to hit $12 billion this year,” concluded Hardy.

NZUSA is the national representative body for tertiary students, and has been advocating on student issues since 1929.

ENDS