Education: Students rebel over debt

Education is one of the big election issues. Bronwyn Sell reports.

A 25-year-old Auckland University student told me the other day he squandered his vote last election on "some marijuana party."

This time, with a student loan of $8000 and growing, he is taking the election seriously. He has not decided whom to vote for, but he wants change.

Maybe he had grown up, or maybe his new political awareness has more to do with changes that have seen most tuition fees triple or quadruple in 10 years, cuts in allowances and more than 250,000 people in debt.

As the students' association starts to fill its foodbanks for the summer, tertiary education has emerged as a major election issue.

National points to figures showing that the number in tertiary education has grown 40 per cent since 1991.

That growth has come at a cost – and more of it is being borne by students. Although the total amount of Government funding for tertiary education has increased, it has not kept pace with the boom.

National sees tertiary education as a public good with private benefits, and students are expected to contribute accordingly to tuition costs – from less than 10 per cent in 1991 to about 28 per cent now.

Three billion dollars of student debt later, the legacy of Generation Debt is filtering into the community and dominating pre-election tertiary education discussions.

The heat of the debate has taken National by surprise. The party planned last year to make changes in 2001 – writing off up to 25 per cent of interest during the study years, ensuring that at least 50 per cent of repayments goes towards the principal, and raising the repayment rate from 14 per cent for each $1 earned to 15 per cent. But a month from polling day – after Labour released its tertiary policy – National brought the changes forward to next year.

Labour goes further. It promises to charge no interest for most borrowers while they are studying, to waive interest payments until income reaches $25,000 (at a cost of $115 million next year) and to review the loans system.

The Alliance has the most generous policy, scrapping interest altogether. New Zealand First would charge 2 per cent interest plus inflation while borrowers study, and Act would privatise the loan scheme.

The Alliance is the only party that would give all students an allowance and scrap fees (over three years), all paid for by tax increases, although Labour would urge tertiary institutions to indicate fee levels for three-year periods.

Future directions for tertiary education are hazy, and neither major party is coming up with answers – or money.

National has been tinkering with a tertiary education review since 1997 but it shelved an unpopular white paper when it announced a package of science and technology study incentives in August.

Labour has acknowledged that the quality of tertiary education is at risk because of falling public investment.

Both have promised think-tanks to develop vision for the future and more funding and support for science, technology and research to foster a knowledge economy.

Tertiary leaders welcome the extra targeted money, but say it is little more than Sellotape on the crumbling research infrastructure of their universities.

With increased competition for students, they have tried to keep fees low and cover shortfalls by cutting costs.

Three weeks before the election, the University of Auckland council raised fees 11 per cent because it fears for its academic reputation after a decade of neglecting its infrastructure and because it can no longer rely on public money.

The increasing costs to students have brought an equity debate into election lobbying, with students' associations saying tertiary education is becoming a privilege for the elite.

Whichever way the vote goes on November 27, the loan burden will ease on people who are still studying, more so if Labour gets in.

But student loans and tuition fees will remain, unless the Alliance gets a majority.