CPAG imageChild Poverty Action Group (CPAG) has launched  Laybying our future: The state of student hardship in New Zealand.

The report, written by a Master’s student Max Lin, looks at the challenges of very low levels of financial support on students. 

The report recommends the reintroduction of interest on loans in return for more funding for students’ living costs.

Child Poverty Action Group economics and welfare spokesperson, Susan St John said

“…even with zero interest, students in modest or low-paying jobs had trouble paying off their loans, which incurred compulsory repayments if students earned more than $19,084 a year (or $367 a week) before tax. Those that get modestly-paying jobs or are women at home with part-time work, they end up with this 12 percent effective tax that adds to everything else that they’re paying on the income that they’re earning and that is having disastrous effects on their lives.”

The report’s recommendations:
  • Unfreeze the parental income threshold and increase the eligibility and amount of Student Allowance.
  • At the very least, increase the maximum amount that can be borrowed for living costs and allow students to borrow up to the combined level of Student Allowances and the Accommodation Supplement.
  • Make income support available for all students during the summer period from December to February.
  • Increase the student loan repayment threshold and adopt a progressive system more similar to Australia’s system.
  • Increase subsidies for students living in high-rent areas (over two-thirds of their income).
  • Increase funding for tertiary education so that the cost is not transferred onto students and consider the partial write-off of student debt.
  • Evaluate the trade-off between a no interest rate policy and bringing back interest on student loans together with adequately funding universities and student support.
  • Increase supplementary benefits for students with additional needs, such as dependent children and disabilities.