Friday, January 25, 2008

Time to increase student allowances

Tertiary education Minister Pete Hodgson has hinted that he might increase student allowances in the budget. Good. As the story points out, it hasn't been adjusted for many years, and desperately needs to be. But while increasing payments will improve the lot of those students lucky enough to receive them, it won't do much to reduce those staggering debt levels, due to the simple fact that very few students are eligible for assistance. According to the Ministry of Education [XLS], almost half a million people participated in tertiary education in 2006, 307,000 of them full-time or full-year (and thus meeting the most basic eligibility criteria of being a "full-time student" in one sense or another). But of those, only 59,000 - one in five - received any form of assistance. And that number has been dropping steadily as incomes have risen while eligibility thresholds have remained static.

So, while a Good Thing, increasing allowances won't do anything at all to help the 80% of students who don't receive them, and who are responsible for most student debt. If we want to do that, we need to significantly broaden eligibility. Adjusting income thresholds so they reflect the current economic situation, rather than that of 1992, would be a start. But ultimately, re-universalisation should be the goal. No-one should have to borrow for food and rent in this country, and I'd have thought a Labour government would recognise that fact.