Students, loans, fees and the way ahead
This weekend’s Dominion Post carries a two page spread bemoaning the plight of students. Long working weeks, on top of expectations of essay writing, reading and exams each semester, coupled with debt, fees, and $150 max from the government via a student loan leave most with no choice but to work as well to make ends meet.
Pete Hodgson, Minister for Tertiary Education, says that the $150 isn’t intended to be enough to live on – it’s the same as they would get on benefit (well, nearly – you get a few dollars more on benefit). But of course, what Mr Hodgson sidesteps is if you are on benefit you don’t have to pay it all back at the end.
Of course, by highlighting the way it’s not supposed students would be able to live on $150 a week, he also highlights the shockingly low rate of benefits – which people conversely are expected to survive on. Perhaps it’s time for the government to return to school and learn logic. I must be missing something, but to my eyes there’s a lack of ethics and logic.
Back to students. I benefitted from a meagre maintenance grant and having my fees paid. Even so I had to work. So during my undergraduate work, I had summer jobs. I was able to rely on many years experience in the IT industry, and found jobs in that sector. But work I had to. Of course I’d rather have been having summer holidays, but there simply wasn’t room. So Pete Hodgson’s assertion that students should take on summer work rings true with me. But only to a point.
Having no loan system, I was able to walk away without debt at the end of my degree. There’s little hope for students these days to do the same.
That means we are normalising debt. If we normalise debt within a system, is it any wonder that young people are more comfortable to run it up and live with it? It’s not like they have had a great deal of choice in the matter – all the advertisers have to do is take advantage of their in-built necessary openness to being in debt, and create desire for other objects of desire.
Student loans are interest free once you have finished your degree, so long as you don’t work outside the country for more than 6 months. That’s a big help, but not a huge help. Once you start earning more than $18,148 the IRD claw back 10 cents in the dollar to start repayments. Overseas jobs pay significantly more than NZ equivalents – witness the exodus of doctors all trying to find a means of paying off massive debt. In a recent survey, over 75% of doctor respondents all identified they had a debt of more than $50,000, and 13% of more than $100K (see here too).
Tuition fees in New Zealand remain among the highest in the OECD.
It seems to me that, for example, the Minister for Tertiary Education would do well to have a long coffee break with the Minister of Health to think through how they might address the shortage of doctors in this country, and the problems of student debt.
By no means limited to medical education, here’s my two cents worth of policy solution.
The government identify the top areas of skill/profession shortage every few years, and make either make education free, or pay for the tuition fees for students to study in those areas. Medicine might be one of these. Nursing might be another. Robust enrollment and selection criteria would allow us to select the brightest, best, most committed, and most appropriate students (it would allow, for instance, for some positive discrimination in certain areas). Part of the deal would be they give the first 5 years to working in this country – but that would be less of a stick and more of a carrot because they don’t have a loan hanging over their heads any more. They could proudly contribute to NZ life and development. They might even be more likely to be willing to call it home (versus the vast number of “kiwi born” professionals who “make it big” overseas).
Furthermore, this idea can be extended simply. At the moment industry seems to get off relatively lightly, but what about industry beefing up its involvement with tertiary education by committing to pay for courses in certain areas (e.g. industrial design, agricultural science, tourism). This would bite no doubt into the immediate dollar-profit line, but increase exponentially the future profitability of companies by re-creating a modern day apprentice system through which students became tied to companies for a set period of time, and companies benefitted again by keeping the ‘brightest and the best’ onshore. It happens in small ways already, but it could be so much bigger and more beneficial.
There’s a lot more to be said – but this post is too long already. I think it’s enough.
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