Background information:
79,072 students enrolled at university (March 1999)
43,698 at polytechnics
7,446 at Colleges of Education
1,360 at Maori universities

TRENDS:

 More students are enrolling at polytechnics rather than universities. Student enrolments at universities this year are down by about half of one per cent while polytech student numbers are up by just under five per cent.

 Overall participation in tertiary education and training has increased but the average funding per student has decreased. This means that tertiary institutions are under pressure to achieve efficiencies or to increase revenue.

 Revenue pressures can result in courses that are “sold” more with the finances of the institution in mind than the employment outlook of the individual.

THE NEW ZEALAND FIRST PHILOSOPHY

 Education is an investment in our nation’s future. Ideally a fair proportion of education investment should be excluded from the calculation of budget deficits or surpluses.
 New Zealand’s economic future depends on the skills, adaptability and ideas of its workforce. There are great social benefits from having an educated and involved citizenry.
 Education is a public “good “which also accrues private benefit.
 The market model is deficient for areas of social policy such as education.
 Although more New Zealanders are receiving tertiary education or training, New Zealand First is concerned at our inability to supply sufficient numbers of scientists, technologists, researchers and skilled trades people.
 It is essential that skills training and continual upgrading training programmes be accessible, affordable, and appropriate.
 Market force ‘bums on seats’ policies do not necessarily deliver courses that are good for students or meet our social and economic needs.
 To achieve the essential goal of increased numbers of people in tertiary training the previous governments have demanded unacceptable sacrifices from tertiary students.
 The existing policy of high fees and student loans indicates, mistakenly, that education is a marketable commodity and that burdening young people with high debt levels is acceptable.

THE IDEALS

 Education is one of the foundation stones that an enlightened society is built on.
 It must help the individual realise his or her human potential,
 It is also the key to a nation’s social and economic future.
 Tertiary education cannot focus solely on employment but it must be an important element of any system.
 It must enhance needed vocational skills,
 It must include research.

New Zealand First is committed to the ideal that every young New Zealander is entitled to the best possible start to their working career.

THE REALITY (DEBT)

New Zealand students have to climb a growing mountain of debt that is now $3.24 billion dollars high. It is growing at the rate of $1.5 million a day – at $62,500 an hour - at more than a thousand dollars a minute.

THE EFFECTS

 We are concerned that many young people, who seek qualifications, are crushed under a debt burden for a large part of their working lives.
 It will impact on every decision they make about their lives.
 It will affect their credit rating, their future relationships, and their opportunities to set up in business.

SOME ANSWERS FROM NEW ZEALAND FIRST

 New Zealand First has already announced that it will reduce the interest rates on student loans.

 The cost of the loan while a student is involved in full time study will cover the inflation rate – so that students repay what they borrow in real terms.

 The threshold income at which the loan starts to be repaid will be reviewed.

 When the study course is complete and students are earning over the threshold income, the interest rate will be set at only two per cent interest above the inflation rate.

 The additional two per cent will apply only after the threshold income limit has been reached.

This plan cuts existing interest rate by nearly two thirds. Today’s rates include a loading of one per cent on all students to cover those who default. This unfair practice means that honest students pay for those who don’t repay their loans.

The New Zealand First plan is a realistic debt repayment system. It is more likely to achieve debt repayment and less likely to send young people overseas.

New Zealand First also believes that the loan burden could also be reduced by introducing a system that allows the individual to “work off” part of the debt.

 A teacher, a doctor, or a nurse, could volunteer to work in a specific area for a set period of time in return for a reduction in their student loan by a set amount.

 This system would allow these graduates to provide a professional service for areas of New Zealand which struggle to attract applicants.

 For example, there is a shortage of rural doctors and some of rural schools find it difficult to attract suitable graduates.

 The other benefit would be to individuals. The loan would be reduced and he or she would gain some practical experience.

 New graduates would not work in difficult areas without proper supervision.

 The individuals selected would have their debt reduced by an agreed amount for each year of approved service.

 This system could be extended to other graduates in other disciplines and it could work with various forms of trade training.

SCIENCE AND TECHNOLOGY

There are too few highly qualified graduates in the areas of science and technology.

 New Zealand First will increase the proportion of government funding (from the present 72%) towards the costs of some science and technology courses.
 This funding could be lifted to eighty or even ninety per cent for some courses where there is a shortage of graduates, and where there is direct economic benefit.
 At postgraduate level, New Zealand First will introduce more scholarships in selected courses to ensure the best students are not lost to New Zealand. As well as qualifying the student to the highest level, the country would benefit by any research or development work that was undertaken.

OTHER MEASURES

New Zealand First will:

 Re-establish the proportion of tertiary tuition course costs to that of the 1998 budget, and require greater accountability by institutions in arriving at course costs.
 Reinstate access to the Emergency Unemployment Benefit for students not receiving allowances.
 Work towards a universal student allowance by progressively increasing the family income levels at which the abatement commences and when allowances disappear.
 Clearly define the status of wananga along iwitanga lines and provide initial capital funding.
 Create a new class of institutions, namely Universities of Technology.

NEW ZEALAND FIRST STUDENT LOANS SCHEME ESTIMATED COSTS

Year One: $340million. Year Two: $341million. Year Three: $342million.

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