Loan cuts for older students attacked

The Tertiary Education Union says funding has been 'savaged', with total spending falling by at least $200 million a year, or over 4 per cent. Photo / Martin Sykes

Tens of thousands of students will find it harder to fund their study and there are fears some may be forced out altogether as a result of changes to the student loan scheme.

Tertiary Education Minister Steven Joyce yesterday confirmed changes to student loan eligibility in the Budget which have been designed to save millions over the next four years.

One change restricts borrowing to people aged over 55 to tuition fees only - meaning they will not be eligible for course costs of up to $1000 a year or living costs of up to $160 a week.

The move has angered older students, who say it is age discrimination, and prompted Universities NZ to question the message being sent to older people wanting to retrain or upskill.

Part-time full-year students, of whom there are nearly 100,000, will also be prevented from borrowing course-related costs of up to $1000 a year for things such as books, uniforms or study materials.

Mr Joyce said the changes were designed to limit lending to borrowers who were less likely to repay their loans, while also ensuring that all borrowers who had repayment obligations were meeting them.

"We need to ensure that borrowers understand that when they choose to access the loan scheme, they are also choosing to take on all the responsibilities that come with it."

Union of Students' Associations co-president Max Hardy described the changes as "age discrimination which would make it harder for those over 55 to upskill and retrain".

"At 55 many students have up to 20 years of work left - that is a hugely valuable contribution ... the Government wants to say goodbye to."

The union's women's rights officer, Caitlin Dunham, said many students studied part-time because of circumstances - such as raising a family, having a disability or trying to juggle work and study together.

Many were almost on a full-time study load and would suffer as a result of the cuts.

"They're seen as part-time, yet still face the same childcare, textbook and transport costs as full-time students."

Universities NZ chairman Derek McCormack said that while he did not think the loan changes would affect universities much, he was concerned at the message to older students.

"I don't think it's going to be good for the economy to have people who are 55 thinking they shouldn't do any upskilling or retraining.

"I think the signal has gone out from the Government: 'We don't want you in university education.' That might not be what the Government intended, but I think some people are going to take it like that."

Student loans changes were only part of the tertiary Budget which included a 2 per cent increase in the funding rate for all degree and postgraduate courses, 750 additional places for high-performing private training establishments, $17.5 million for refugee and migrant language courses and a $40 million increase over four years to raise the education profile overseas.

Professor McCormack said he was "pleased but not satisfied" with the package for universities.

"In these tight times I think getting the 2 per cent increase ... shows a very positive recognition by Government of the need to keep that level of advanced education going in order to ensure we can move forward in the economy."

The downside was that it was less than inflation and the real rate in universities tended to be higher than the CPI.

"We will be going backwards but not quite as fast as if we had nothing."

The Tertiary Education Union said tertiary funding had been "savaged" with total spending falling by at least $200 million a year, or over 4 per cent.

"It is not just student loan funding that has been cut," said president Sandra Grey.

"Over the next four years, there are also cuts to tuition funding, student allowances and other funding."

STUDENT LOAN SAVINGS

Total spending

* $4.2b on tertiary education.
* $446.6 total over five years under plans announced in the Budget.

STUDENT LOAN CHANGES:

* Restricting eligibility for over-55s and part-time students.
* Freezing the repayment threshold at $19,084 until 2015.
* Cutting the repayment holiday for overseas-based borrowers from three years to one.