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July 12, 2010 | by  | in News | [ssba]

Government spending on allowances reaches peak


Ministry of Education figures released last month show government spending on Student Allowances is the highest in almost 20 years.

The number of Student Allowance recipients jumped by 26 per cent between 2008 and 2009. More than 82,000 students used the Student Allowance scheme in 2009, pushing spending to $516 million.

The 2009 increase was a lot higher than expected, with the previous increases between 2006 and 2008 sitting around 5 per cent.

Students can receive up to $219.25 a week, which they do not have to repay.

Higher demand at tertiary institutions due to high unemployment is considered to be a major contributing factor.

The reduction of the parental income testing age to 24 and increases to parental income thresholds have also increased access to allowances.
NZUSA Co-President David Do says students and families have been hit hard by the economic climate.

“Lower parental incomes mean families are finding it more difficult to support students who may already be forced to live at home due to inadequate student support,” he says.

“The recession also meant that students have had difficulty finding summer work, which means they have fewer savings to offset academic and living costs for the rest of the year. This is leading to increased student poverty­­—many of our associations have reported higher demand for their foodbanks and financial hardship schemes.”

Tertiary Education Minister Steven Joyce told Morning Report that student numbers are likely to fall next year, due to changes to eligibility for student loans, new performance requirements for loans and the fact that New Zealand is emerging from the recession.

According to a 2008 Ministry of Education report, Educational achievements of student support recipients, those who only receive student allowances do better academically and are twice as likely to achieve successful completion of their studies than those with no financial support.

“The findings of this report come as no surprise. NZUSA has long advocated that adequate support in the form of student allowances is integral to academic success. Given this evidence, we would hope the government views increased eligibility to allowances as a tool to increase student achievement,” NZUSA Co-President Pene Delaney says.


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