Editorial: Qualifications certainly don't come cheap, unfortunately

File photo / Richard Robinson

It is staggering to think people living in the Bay have $300 million in student loan debt.

Figures provided to the Bay of Plenty Times Weekend show 18,500 borrowers with post codes registered to the city had a total student balance of $315 million on July 31, 2014. Nationally $14.3 billion was outstanding including $3.1 billion owed by borrowers living overseas.

An Inland Revenue spokesman says the majority of people are repaying their loans on time. Those living in New Zealand pay no interest but borrowers living off shore for more than six months are charged 5.5 per cent.

Those embarking on tertiary study know they need qualifications to pursue a career choice. The cost of obtaining those qualifications is not cheap but it's a burden they are willing to take on in order to work in a field that suits their interests and talents. A belief the qualifications they obtain will most likely increase their earning potential is no doubt a source of comfort.

How frustrating then for graduates such as Maddi Brown who has a $40,000 student loan debt and has not been able to secure work in her chosen field. Like many others her debt level spiralled because she was not eligible for any allowances due to the income threshold of her parents.

The 21-year-old studied at Victoria and Otago universities and has a degree in communication studies with a minor in media and film but is working in administration.

Miss Brown says she has been left feeling disheartened. I would feel ripped off.

According to Study Link, a service of the Ministry of Social Development, if students' parents earn $55,027.96 per year the amount of student allowance is reduced, and they are not eligible to get an allowance if their parents earn more than $84,016.80 and they still live at home or $91,264.01, if the student lives away from home.

It is likely - given the high cost of housing and its impact on mortgages and the rising cost of living - that many families would struggle to provide substantial assistance to a child who is studying, especially if they still have other children at home.

As Miss Brown points out: "I ended up with a bigger loan than anyone else because it's not like my mum had a spare $20,000."

Students should, of course, support their study through part-time work but, again, this is unlikely to cover all their study and living costs. I don't believe a completely free education is sustainable in the long run, but assistance assessments should focus more on a parents' ability to assist their children than just their incomes.