Loans drive nurses out

By MARTIN JOHNSTON health reporter

Nurse Desiree Andrew may be lost to the job she loves because of the pay rates and the dead weight of a 20-year student loan.

The 24-year-old Starship children's hospital nurse calculates that is how long it will take her to pay her $30,000 in debts, including a $25,000 student loan built up while she was a student at Otago Polytechnic. She has repaid $2000 of the capital since graduating in 2000.

Her case illustrates the findings of a study on nurses' student loans, which concludes that they are reinforcing the nursing shortage. It found that some nurses who had done another degree before starting nursing training owed more than $50,000 and were never likely to pay it all back.

The study comes three months after the nurses' union began a push for higher pay after its comparisons with other jobs and countries found they were underpaid by at least 20 per cent.

The study's backers, the Nurses Organisation and the University Students' Association, say nurses' debts, which were found to average more than $19,000, may be the most significant factor pushing young nurses overseas and delaying their return.

"It is contradictory to invest in educating young New Zealanders and then effectively drive them out of the country to repay debt."

Ms Andrew, a third-year nurse, is on a basic salary of $39,700, which rises to about $43,500 after penal rates and overtime. She also works every second Saturday night in a bar.

But she has been lured overseas by the prospect of clearing her debts much faster. She is arranging to start work next January at a United Arab Emirates hospital, at which she will be paid $50,000 a year tax-free and receive free accommodation.

"I work out I'm going to save $400 a week living over there and I will have my loan paid off. I might really enjoy the money and keep working to get a deposit for a house."

She loves nursing, but is unsure if she will eventually return to it in New Zealand. She said she might become a drug company sales representative because it paid more than nursing.

The students' association co-president, Fleur Fitzsimons, said the study was "further evidence of the way student loans are wreaking havoc on New Zealand society". The association wants education fully funded by the Government.

The Nurses' Organisation believes New Zealand is short of about 2000 public sector nurses and says annual staff turnover is up to 20 per cent in some areas.

Chief executive Geoff Annals said the research showed the nursing shortage would be alleviated if the Government paid in full for nurses' education.

"New nurses could be debt free if the Government paid less than $30 million a year in tuition and allowances."

He said this was far less than the $100 million the Health Ministry had estimated district health boards spent annually on nursing recruitment.

The study found that those who went overseas had paid off much more of their student loans than others. A third of nursing students were 40 or older and, as they were unlikely ever to clear their student loans, saw no point in making more than the minimum repayments.

Associate Education Minister Steve Maharey said the Government had promised to improve access to student allowances, which would reduce the amounts that students, including nurses, needed to borrow.

The Government had also set aside $23 million to spend over the next four years on bonded scholarships and research fellowships to attract students to particular jobs. In the health sector they would most likely be for doctors initially.

Junior doctors' union head Deborah Powell said her members graduated with total debts averaging $80,000 to $100,000, twice the tolerable level.

Nurses and debt

* 376 nurses and midwives replied to a postal survey.

* Nurses' average total debt at graduation was $19,294, including average student loans of $17,079, plus debts to banks, families and friends.

* Total for all bachelor's degree graduates averages $20,500.

* 22 per cent had considered leaving nursing and more than 60 per cent had considered going overseas because of their student loans.

* 1154 comprehensive nurses graduated last year, nearly a third fewer than in 1990, when fees started rising steeply.

* Tuition fees mostly $3500 to $4700 annually for three-year undergraduate course.

* Nurses' salaries are about $30,000 to $44,400 before overtime or penal rates.