by Holly Walker
Since last month’s Budget, I’ve been trying to get to the bottom of what the changes to student loans and allowances will mean in practice, especially for postgraduate students who were previously eligible for the allowance and now won’t be.
I asked Tertiary Education Minister Steven Joyce some questions in the House in which he claimed that these students would simply be able to borrow living costs as part of their student loan, and that this would be practically the same amount as they get on the allowance and should be plenty to allow them to meet their basic costs.
Now, putting to one side for a moment the fact that this will mean that personal and total student loan debt will balloon, in direct contravention to some of the Government’s other stated aims about reducing student debt, a very practical question remains for these students: will they still have the same amount to live off each week?
The maximum you can borrow for living costs is $172.50 per week, but the maximum a single student over 24 can get from the student allowance, including the accommodation benefit that is automatically added, is $244.96 per week. That leaves a shortfall of about $70 a week.
That might not sound like much to John Key and Steven Joyce, but it means a lot if it’s your whole food budget. It seems pretty important to know whether postgrad students will still be able to access this much per week, even if they do need to borrow it. For evidence, see this great open letter to John Key from a clinical psychology student about exactly what these changes could mean for students like her.
Steven Joyce’s replies in Parliament implied that everyone who is currently eligible for a student allowance with its automatic accommodation benefit top-up will now be eligible for the regular accommodation supplement in addition to the living costs part of the student loan. But my understanding, and the stories I have heard from affected students, is that the two are assessed quite differently. As I understand it, there is no guarantee that you will be eligible for the accommodation supplement just because you were previously eligible for the student allowance, nor that you will be able to claim the same amount.
So I’m trying to figure out from the Minister exactly how this is going to apply in practice: not easy! What I have discovered, by means of a written question, is that the figures in the Budget were calculated on the assumption that affected students would access the accommodation supplement at the same rate that they currently access the accommodation benefit:
Question: What assumptions about numbers of students accessing the accommodation supplement were used to calculate the new spending on Accommodation Assistance related to Removing Student Allowance Eligibility for Postgraduate Study and Long Programmes, as detailed on page 76 of the Information Supporting the Estimates in Vote Social Development for Budget 2012?
Answer Text: The calculation for the accommodation supplement take-up for students affected by this change assumed that this group would access the accommodation supplement at the same rate as they currently access the accommodation benefit.
So the Government has assumed that everyone affected will be able to access the accommodation supplement on top of the living costs payment.
The real question is, is this a realistic assumption? Are the criteria the same for the two different types of accommodation assistance? Will the same number of students actually be able to access the accommodation supplement?
Every question I’ve asked along these lines comes back with the same answer: “This will depend on the student’s individual circumstances and actual living costs.” Well yes, obviously. But presumably some modelling has been done to assess how students currently eligible for the allowance will be affected by the change en masse.
It seems strange to me that for the purposes of budgeting the Government is able to assume that everyone will be able to access the same assistance, but can’t confirm whether this is actually possible under the current criteria.
One group who I’m sure do know whether this is a realistic assumption are those facing the loss of their student allowance!
If you are potentially affected, or have experience of switching from the student allowance + accommodation benefit to living costs + the accommodation supplement, let me know! I’d love to hear how it worked and whether you were able to access the same level of assistance. I trust that your replies will be more helpful than the Minister’s.