Overhaul NZ student support system, say students

Students have demanded an overhaul of New Zealand’s income support system, saying soaring prices and scarce housing are forcing them into a life of mould, cold and “two-minute noodles”.

A survey of almost 5,000 mostly university-level tertiary students has found that about two-thirds regularly go without “bare essentials” such as food, clothing and healthcare. Three in five receive no financial support from their parents, and the three in five living in rented accommodation typically pay more than half their incomes to keep sometimes substandard roofs over their heads.

The report, produced by a group including the Green Party and the New Zealand Union of Students’ Associations, says cost-of-living pressures are robbing students of educational time. About three-quarters of respondents said they spent at least 10 hours a week in paid employment and one-sixth were working more than 20, jeopardising their educational outcomes and “driving up drop-out rates”.

The real value of income support has deteriorated by about 20 per cent over the past two decades, the survey found, with a 50 per cent increase in average allowances failing to keep pace with an 87 per cent rise in living costs. Since the survey was conducted in April and May, New Zealand’s inflation rate has hit a 32-year high of 7.3 per cent.

The report authors say student allowance payments – currently capped at between NZ$240 and NZ$320 (£124 and £166) a week for single students without dependants, depending on their age and living circumstances – should be raised to match real living costs.

They also want the government to stop pegging payments to the earnings of the students or their parents or partners. Currently, students lose a dollar of income support for each dollar they earn over NZ$241.

The authors are particularly aggrieved at the Labour government’s failure to honour its 2017 pledge to reinstate living allowances for postgraduate students, which were scrapped by the previous government in 2013.

Chlöe Swarbrick, the Green Party’s education spokeswoman, said the shortcomings in students’ living conditions were “the consequence of political decisions that have been made over the past few decades and continue to be made to this day”.

Sam Blackmore, vice-president of the New Zealand Union of Students’ Associations, said allowances should not be affected by the extra money people were forced to earn to weather a cost-of-living crisis. “A universal education income – a weekly payment to every student, regardless of level of study, age, parental income – would help students meet day-to-day costs and reduce long-term debt.”

Education minister Chris Hipkins said the government had done much to improve students’ lot, including raising student allowances and living cost loans by NZ$50 a week in 2018 and a further NZ$25 this year. It had bankrolled hardship and technology access funds during the pandemic and introduced a new code of practice for the pastoral care of students.

Mr Hipkins said students would also benefit from broader government initiatives such as temporarily halving public transport fares, implementing “healthy homes” standards for renters, making “the biggest investment in mental health in New Zealand’s history” and extending NZ$350 cost-of-living payments to 2.1 million low-income earners in this year’s budget.

“I am proud of the progress we are making to ensure university is affordable for young people,” he said.

Under New Zealand’s income support system, full-time students on allowances below $NZ282 a week can supplement their allocations up to that threshold through income-contingent loans. Some 117,000 students received support in the first three months of this year, of whom 69 per cent borrowed the entire amounts.

But although the system is primarily financed through loans, boosting payments is an expensive proposition for the government, partly because New Zealand’s student debts are not indexed to keep pace with inflation.

The survey found that students in rental housing attracted average weekly earnings of NZ$418, of which NZ$234 went on rent. The report says Maori and Pacific Island students, who proved most likely to lack money for essentials, were under-represented in the survey.

john.ross@timeshighereducation.com