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Budget 2006: Further financial help for students

Hon Dr Michael Cullen
Minister for Tertiary Education

Further financial help for students

More than 10,000 students will receive extra financial help as a result of Budget 2006 as the Labour-led government continues its drive to make tertiary education more affordable for more New Zealanders.

Students will benefit from an extra $31.1 million over the next four years in new funding that will increase the number eligible for student allowances and available bonded merit scholarships, Tertiary Education Minister Dr Michael Cullen said today.

“These student support measures continue this government’s efforts to reduce the debt burden on students and encourage more of our high quality graduates to stay in this country so they can contribute their skills and talents for the benefit of the economy.

"We have made substantial progress already this year with no further interest being charged on student loans for those students living in New Zealand. This will cost the government about $1 billion over the next four years."
In the measures announced today:

• The parental income threshold increases by 10 per cent. The threshold is currently $35,700. From 1 January 2007, eligible students whose parents earn less than $39,270 will get a full student allowance. This will cost an estimated $14.3 million over the next four years.

• Doctoral students will have their allowance entitlement increased when PhDs and professional doctorates are added to the list of Recognised Long Programmes for student allowances from 1 January next year. The government has committed $3.8 million over four years to this policy.

• The bonded merit scholarship scheme will be expanded by 500 at an estimated cost of nearly $13 million over the next four years. From 1 January 2007, 1,000 students a year will get help with course fees. The scholarships provide $3,000 per academic year for course fees, from the student’s second year for up to four years of study. After graduating students are bonded to work in New Zealand for a period as long as the duration of their scholarship.

"These initiatives build on changes to the student support system made in previous budgets including the 20 percent increase in the student allowance parental income threshold in Budget 2004, the increase in the personal income threshold in Budget 2005, and the introduction of the bonded merit scholarship scheme in Budget 2005.

"The initiatives in Budget 2006, coupled with the interest free student loans policy, show that the Labour-led government recognises that students need more support if we are to produce the highly skilled workforce needed to drive the transformation of the New Zealand economy," concluded Dr Cullen.

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