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Future projections for tertiary students released

6 December 2012

Future projections for tertiary students released

The future for the generation of young New Zealanders who enter tertiary education in the next five years has become clearer from several sets of official information released by the Government this week.

Incoming student presidents who are part of the NZ Union of Students’ Associations (NZUSA) have been considering likely trends in the tertiary education sector at a series of workshops this week with various experts. This has included reviewing some of the data contained in this week’s annual releases about student loans and allowances, as well as a mountain of 61 documents just released by the Government under the Official Information Act.

Key pointers to current trends are:

• Although there will be fewer students a greater proportion are being put in the position of taking out larger loans. The flow of people into tertiary education is expected to flat line, or reduce. This is in line with a demographic dip in the number of 18-22 year olds, but the policy expectation is also based on the assumption that slow improvements in the job market and lower returns from tertiary education will see more people choose paid work over vocational training and postgraduate study (which has otherwise been increasing).

• The proportion of women accessing student support is now decreasing for the first time in almost two decades (down from a highpoint of 59.6% in 2004 to 55% in 2011). The total number of women with student loans in 2010 topped 124,000 – 28% above the number of male borrowers.

• A reduction access to Student Allowances thus making study less affordable.

• A reduction in the number of mature students, part-time students and a significant fall in the participation in tertiary education by Māori and Pasifika students (slipping backwards by 6% and 5% respectively between 2010 and 2011).

Policy thinking revealed from reviewing segments of this year’s Budget advice included MSD official’s arguments against stripping allowance eligibility from postgraduate students due to the likelihood of negative impacts, and Treasury’s advice against increasing the loan repayment threshold because of its unknown impact on Effective Marginal Tax Rates. Other proposals that were mooted by officials, but rejected or put on hold, were:

• A proposal to have different loan repayment rates for higher earners

• Dropping the parent/household allowance threshold for accessing a full Student Allowance from parents/households earning $55,000 or less, to $41,000 or less, which would have immediately impacted on as many as 26,000 students

A drive towards putting students under ever-greater financial pressures was noted, as evident in the average exit debt of new graduates escalating to $22,060 – the highest level since the loan scheme began twenty years ago.

A concern was also raised that the employment projections behind 2012 Budget decisions seem optimistic given youth unemployment is at a historical high. Treasury projections were that levels at or above 10% unemployment for 20 to 24 year olds will continue for at least another year, and that unemployment 15-19 year olds will stay above 20% for the next 1-2 years.

ENDS

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