Student loan access for thousands under threat from proposed Budget funding cuts

Government plans to stop students from being able to apply for student loans, while studying at private training establishments (PTEs) that do not receive government subsidies, amounts to protection for government-owned institutions, a sector leader says.

Since 1996, New Zealand students undertaking a New Zealand Qualifications Authority (NZQA) qualification, at a PTE, polytechnic or university have had access to student loans for fees and living costs. From January 2007, that eligibility will be removed for qualifications that do not receive 'student component funding' (SCF) - government fee subsidies.

The proposal, announced in this month's Budget, is expected to affect thousands of students.

New Zealand Association of Private Education Providers president Paul Decker (pictured) told Subtext that the move would reduce students' choice about which institution they attended.

"Quite frankly if you don't have the cash then you will have to attend a government subsidised institution. What's happened to freedom of choice?"

Mr Decker said the government was effectively telling students that if the institution they chose did not have SCF it could not guarantee the quality of the course.

"This simply isn't true. All qualifications approved by the NZQA have the Crown stamp of quality, and this has never been associated with the funding structure.

"Many NZAPEP members who do not receive SCF offer qualifications that have that quality stamp, having been approved by the Qualifications Authority. They just were never subsidised by the government."

Mr Decker said getting SCF was no indication of quality "in any way whatsoever".

"What is most disappointing is that the government is only giving six months' notice to affected providers. It gives them no real opportunity to plan for their or their students' future.

"If the Crown really wants to go down the path of restricting all New Zealanders' access to student loans, then a longer lead time would have made sense."

Mr Decker said the PTEs affected by the move offered all levels of courses and qualifications, and their future to exist beyond 2006 was now in doubt.

The New Zealand Herald has reported that Tertiary Education Commission acting policy and advice group manager James Turner said the commission had to accept that some providers would possibly close.

But the policy change would help students to make informed decisions about selecting tertiary providers and would prevent an "explosion" in the amount of funding.

He said the Government wanted to prioritise its spending now that student loans were interest-free.

Education Forum policy advisor Norman LaRocque said the plan defied logic and was further evidence of the government's anti-private-sector bias.

"Why should students at PTEs be penalised for attending quality assured institutions simply because those institutions are not subsidised through the SCF?

"If students are willing to pay for their own education - without subsidies - why do we then deny them access to student loans to help them finance that investment? The whole point of the student loan scheme is to help students pay for the costs of education upfront and repay it once they enter the labour force," Mr LaRocque said.

"The government decision to provide loans only to students who also benefit from the SCF is tantamount to a 'double-or-nothing' student assistance policy. It makes no sense.

"The government has well-established mechanisms to ensure quality operating through the NZQA. That, and not subsidies, should be the test for student access to loans."

The Tertiary Education Commission's web page on 2006 Budget education initiatives includes information on the SCF plan and is at this address.

The New Zealand Herald story is at this web page.