Over-qualified and underpaid

By MARK STORY

With 2000 nursing vacancies around the country, you'd think new graduates would walk straight into jobs and start attacking their student debt.

But, says Nurses Organisation chief executive Geoff Annals, with the major employer of nurses - public hospitals - favouring experience and some specialisation over youthful exuberance, many graduate nurses struggle to get jobs.

Having paid their way through training only to discover they can't find work, graduates can be forgiven for taking their expertise to offshore markets, he says.

The new nurses' plight, says David Penny, team director with Industry New Zealand, is shared by countless graduates from universities and polytechnics across the country who discover there's nothing at the end of their course but unpaid debt.

With the under-skilled and over-qualified accounting for most of the country's unemployed, he's convinced wholesale training providers are more concerned about "bums on seats" than meeting industry needs.

"Any student with a $15,000-$20,000 debt is starting life with a pretty waggy load," says Penny. "If a graduate can move into a job commensurate with their loan, that's okay. But if having done all that study, they still start out on a junior rung, either the qualification is flawed or is not matched to the needs of our employment market."

Adding insult to injury, explains Penny, many graduates have to train further, and take on more debt, before employers consider them useful. There's no better example of this dilemma, says aviation veteran Frank Parker, than helicopter pilot training. He suspects that only five of the 50 commercial helicopter pilots to graduate last year will find jobs in New Zealand.

On a weekly wage of $350, Parker says entry-level pilots will struggle to service the interest on their whopping $80,000-$100,000 student loans, let alone pay living expenses.

Employers typically overlook graduates for pilots with more flying experience. One way graduates can get their flying-time up is by becoming C Category flight instructors.

"But doing that means nudging their student loan up to around $120,000," says Parker, director of Ardmore Helicopters.

With even the best pilot jobs paying only $50,000 a year, John Clements, chief flying instructor with North Shore Helicopter Training, says training costs are out of whack with pay.

"Submerging someone with a $100,000 debt on the pretext there's plenty of work at the end is crap - there are no jobs."

It's the same within the printing industry, says Joan Grace, chief executive of the Printer and Allied Industry Trade Council. Her members are seeing far more graphic design graduates than the industry needs.

And Annals believes a new nurse's salary (around $33,000) simply isn't enough to pay back an average debt of $19,292.

Joint research by the organisation and the University Students Association shows that as a result of student debt more than 60 per cent of nurses consider going overseas; 22 per cent consider leaving nursing; 24 per cent find it difficult to borrow; 78 per cent say saving for the future is difficult; and 72 per cent believe they are stressed by the extra hours they have to work to pay it off.

Before signing up for expensive courses, Stewart Thompson, Industrial Pathways manager at Howick College, urges school-leavers to make sure they know enough to make informed decisions.

Once you've lined up courses that interest you, Thompson recommends you:

* Get holiday work experience to ensure you really want to be in this industry

* Identify long-term industry prospects

* Assess how many jobs are available for graduates

* Identify the career ladder and salary potential.

Thompson also urges students to identify alternative routes to the same qualification, without taking on debt.

Instead of sinking $25,000 (including lost wages) into a polytechnic trade course, he suggests school-leavers investigate what modern apprenticeships, available through industry training organisations, will pay them to qualify in a trade while on the job.

If students have to borrow, Jeff Matthews, senior financial adviser with Spicers, suggests paying it back fast. A student loan of $30,000 held by someone earning $35,000 will take 35 years to repay if they make only the minimum repayments - and, at an interest rate of 7 per cent - costs nearly $80,000 in interest.

"Getting into debt is easy, getting out of debt takes a lot longer," says Matthews. "Making an additional payment of $50 a week on an average student loan of around $20,000 will reduce the repayment period from 17 years to five years, and cut the total interest bill by around 70 per cent."


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