David Miller: The Realities of Life as a Student
The Realities of Life as a Student
As someone who continues to borrow sizable amounts of cash from Her Majesty’s New Zealand Government so I can further my education, I am always interested when I hear calls in the media for fee freezes, interest write offs and increased funding to tertiary institutions. While I am always supportive of such motions, I am never optimistic. For almost the past decade I have seen my fellow students live with increasing fees, less opportunity to acquire financial assistance and funding cuts to the universities. However, while this is a source for disappointment and frustration, I have reached the conclusion that if you wish to study in New Zealand at a tertiary institution then these are the facts of life.
In fairness to the Labour-Alliance coalition, they did inherit a system that was harshly unfair and that was rapidly sapping the lifeblood out the tertiary system. On the back of the National introduced ‘Lockwood Loans’ scheme, students were faced not only with rising fees but also a crippling interest rate. This meant that if someone borrowed in order to study then not only did the interest rapidly multiply the amount that was to be repaid, but there was little incentive to begin paying it back. Many students complained that with the interest National had set being over 8%, the best they could hope to do once graduating was to service the interest, let alone make payments reducing the capital.
Since they were bundled into opposition at the last election, National has offered little in terms of policy in this area. Their plan to repackage student loans as ‘student advances’ is as ludicrous as it is unworkable. I agree with the NZUSA statement that simply putting new names to old ideas will not fool anyone and is not the way to inspire confidence in a party that has an appalling track record when it comes to tertiary policy and issues. What National is recommending is that there be an increase in international student numbers and a scheme that allows students to pay their tertiary fees in quarterly instalments, which is in existence at many institutions now.
Having been critical of National’s policies and position, there must also be a caution to students that they must be realistic about the situation with the present government. While students, including myself, would like to see a system introduced that offers no fees, universal allowances and an increase in funding to the public education system, it is now more an idea than a reality and the reason I say this is because the present government has run out of money.
With news last week that the government has overspent on its budgetary forecasts since taking office, students can expect little in the way of increased financial help. This has been shown by the fact that the government cannot even find $14 million to keep the community wage scheme afloat in light of its huge social spending programme. With the health sector amongst others calling for more funding it is unlikely education will have all its demands, even its needs met.
Hence the current system with its flaws is likely to remain the status quo. Even with an interest rate freeze at 7%, inflationary rises it means that those who do not earn high wages upon graduating or are unemployed will take longer to pay off their loans. As inflation rises there is the fear that those repaying loans will incur more cost than those who are not. However this is the reality of the situation. Education is not a guaranteed ticket to a higher wage and with more people entering the system and more institutions offering degrees, diplomas or certificates, a false expectation has been created of what is to be offered at the end of the study. Today, more employers require or request that the applicant has a tertiary qualification, hence the earning bracket people enter into is not as high as they might like or expect.
The speed with which you repay your student loan will depend upon your earnings and in the simplicity of this statement lays the answer to this debate. Unfortunately there is not much one can do about inflationary pressures except to hope that the government does not raise the interest rates to compensate for any loss of revenue they may incur as a result. It is my opinion that the government will not reduce the fees, let alone wipe them out completely. Even the Alliance, which maintains that it stood for no fees, now says that it does not foresee them being abolished. This is due to fiscal constraints and an inflated social agenda and demonstrates that while in opposition political parties can promise the Earth, when in government the reality is very different. The Alliance claims it now favours holding the interest rate down to 7%.
Whatever is on the student wish list, it is unlikely they will see it acted upon whichever party enters into government. National has shown that it favours inaction over change, while the current coalition while promising much has overspent on its budget, therefore can offer very little. My only hope as a student is that the interest rate is lowered as to make more equitable for all and increase the funding to institutions. I do not expect lower fees and neither should anyone else. That is the reality for today’s students.