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Reasons Why New Student Loan Rules Ain't Right 10

MEDIA RELEASE – PTE Budget Policy Awareness Group

28 July 2006

Ten Reasons Why Implementation of the New Student Loan Eligibility Rules Just Ain’t Right (Reason Number 10)

Reason Number Ten: Taking Responsibility

The plan for implementing the new loans and allowances eligibility rules is quite simply a sloppy, rushed and ill considered policy bungle. Tragically, the price for this bungle will not be paid by those responsible, but by dozens of PTEs in the currency of closure.

This is just a part of what we know:

- Treasury advised the government to gather more information about the qualifications, students, and providers affected by the decision and what the impact on them might be.

- Government agencies had not been monitoring to ensure unsubsidised PTEs were complying with the cap on loans for fees, simply because details of how to implement that monitoring were never finalised.

- The TEC concluded its last funding round, the last opportunity for PTEs to secure PTE funding, a month prior to the Government announcing that without TEC subsidies PTE courses would not be eligible for student loans – thereby cutting dozens of PTEs off at the knees.

The craziest thing about this mess is that the Government could have quite comfortably have achieved its objectives, aligned TEC subsidies with student loans and allowances, without all the senseless collateral damage. All that was required was a touch of commonsense and planning.

New Zealand taxpayers, including PTEs themselves, pay the education bureaucracies tens of millions of dollars for policy advice every year. It is not unreasonable to expect the basics of policy implementation to be thought through.

The bureaucrats sitting behind their desks in Wellington need to remind themselves the affected PTEs are not just sector statistic or a subset of the PTE sector. These are people’s jobs and people’s businesses.

The pending mess can still be avoided. It just requires somebody in Wellington to be big enough to put their hand up and take responsibility for putting it right.

“This is so needless it is absurd,” 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.

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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