Student debt is a normal part of studying right? Wrong! Until 1989 not only were there no university fees, but most students were given a living grant – they were paid to study. That means that of the generation that is in power now, the politicians and the university Vice Chancellors of New Zealand, virtually all of them got to study without the burden of a snowballing loan and got to start their careers with zero debt. Makes you wonder where the fuck the Minister for Tertiary Education, Steven Joyce, gets off saying that students should stop complaining, “keep your heads down,” and take $30,000+ of debt on the chin.
Student debt in NZ is currently around $12 billion, so how did things get so bad in just over 20 years? Here’s the gist:[1]
1989 The Labour Government introduces fees for the first time (around $129) which for the majority of students is covered by their grant, plus there’s a virtually universal student allowance scheme – not so bad right?
1990 Getting cheeky, the Labour Government introduces a flat tuition rate of $1250 per year. That’s a raise of 969% in one year.
1991 Despite election promises to abolish tuition fees, the new National Government instead scraps the flat rate and allows universities to set their own fees, while simultaneously reducing their funding to universities. This is where the shit hits the fan, for the next 10 years fees rise on average 13% per year. Fees setting across the country becomes a tug-of-war between students and uni management, with management proposing fee rises of as much as 45% at a time, often met by student protests and occupations.
1992 The Student Loan Scheme is introduced so that students can cope with their massive fees, but don’t get too excited – they’re accruing interest at 7% even while studying.
1999 Eight years after the flat rate was lifted and fees have increased 142% on average, compared with 13% inflation.
2000 The newly elected Labour Government commits to deal with the problem of student debt, first introducing interest-free loans while studying.
2001 Following this the Labour Government places a freeze on tuition fees until 2003.
2003 Counter to their claim of being committed to “first stabilising and then lowering tertiary fees,” the Labour Government allows universities to keep increasing fees, but now at a maximum of 5% per year.
2004 The percentage of students receiving an allowance is now 29%, compared to 86.4% in 1991.
2006 Following through with their 2005 election promise, Labour introduces interest-free student loans (provided the recipient doesn’t leave NZ).
2008 The Labour Government increases access to allowances and promises to phase in a universal allowance if re-elected, National has no specific policy but promises to be more generous.
2009 The newly elected National government cuts the Training Incentive Allowance for sole parents.
2010 National limits student loans to a maximum of 7 years of study in one student’s lifetime – meaning that students cannot self-fund a PhD so more will have to look for corporate scholarships and tailor their research to external demands.
2011 Access to living allowances and course related costs cut to part-time students and over 55s. Loan repayment threshold frozen at just under $20,000 and repayment holiday cut from 3 years to 1.
Where are we now?
New Zealand has the 7th highest fees in the OECD and a combined student debt-load of $12 billion. The National Party has no desire to reduce student debt but has promised to maintain interest-free loans. This is no guarantee however, given the flippant nature of party promises and, most troubling, the fact that their coalition partner, Act, wants to reinstate interest. Why should this worry you when Act is just a minor party? Because last year Act managed to pass though the ‘Voluntary Student Membership Bill’ which will see Students’ Associations receiving dramatically less funding this year, effectively immobilising them from significantly resisting any major policy changes, say like taking away interest-free loans… Add to this the fact that Act’s leader, John Banks, is currently the Associate Minister for Education and has already pushed though charter schools (a scheme that were never mentioned before the election), and that the Minister for Tertiary Education, Steven Joyce, drops veiled threats when students protest significant policy changes, and you get a climate where our futures become ever more precarious.
Without allowances and interest-free loans the last of the doors will be closed to students from middle to low-income backgrounds and education will finally become the user-pays factory that it has been morphing into over the last 20 years. As students, the only way to stop this is to put our collective foot down, and declare education to be a public good that should be open to all, not just to those who can already afford it. We need to do this, not just for ourselves, but for the generations that will follow us, if we want to stop the escalating income-inequality and if we want to live in a country where people are not crushed by debt before they even get into the workforce.
[1] NZUSA has done up a comprehensive timeline which this is shamelessly pilfered from, you can view it at www.demandabetterfuture.org.nz