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Tertiary savings scheme development

Tertiary savings scheme development

The government is seeking expressions of interest from groups interested in providing a tertiary education savings scheme, Education Minister Trevor Mallard announced today.

"This contestable process is the first step in determining if there is sufficient interest from providers in offering such a scheme and, if so, how best to proceed," Trevor Mallard said.

“The cost of participating in tertiary education is a significant investment for many individuals and their families. We are committed to keeping the costs of tertiary education as affordable as possible and ensuring low-income groups aren’t shut out.

“A scheme with individual accounts specifically for meeting the costs of tertiary education would enable families to plan ahead and would also complement the existing forms of student support.

“To that end, the government is keen to examine options on how a standalone tertiary savings scheme can fit alongside the other parts of our work-based savings package, to be announced in the budget. I would like to acknowledge United Future's support in this."

If the government decides to proceed with a tertiary education savings scheme, further decisions around the detail are still to be made, but it is likely to have the following key features:
Voluntary participation – enrolment in the scheme would be voluntary, and contributions could stop and start depending on families’ financial circumstances.

Government savings contributions – the government is considering providing a contribution to encourage participation in the scheme.

The exact form has yet to be determined but it could include an upfront payment targeted to all children less than six years old to encourage early enrolment in the scheme.

Withdrawals from the scheme – withdrawals from the scheme could only be made for tertiary education costs (course fees, living and other related course costs).

Links with Student Support system – individuals would not be able to access a student loan until they have drawn down funds from their tertiary education savings account. An individual’s account balance would not affect their eligibility for a student allowance.

After expressions of interest have been received, the government expects to make further decisions on a tertiary education savings scheme by August. The RFI is available on be http://www.treasury.govt.nz/tess

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