17 September 2014
The New Zealand Union of Students’ Associations (NZUSA) is extremely concerned at a jump in average student loan debt, and increases in student concern for the future amongst those who have debt.
These new findings are part of the longitudinal Income and Expenditure Survey conducted by NZUSA, involving 5000 students from universities and polytechnic conducted in August of this year. The study reveals that although the numbers of fulltime students with a student loan debt has decreased slightly from 80% to 78%, it also revealed that 83% of students expect to be in debt by the time they graduate.
“The average student loan debt is now $24,405, up 57% since 2011. The median debt is $20,000, up from $12,000. This has been driven by increasing fees but even more so by restrictions on allowances forcing more and more students to borrow to live from week to week,” said NZUSA President Daniel Haines.
“The figures are higher than those reported in the Governments’ Student Loan Scheme Annual Report, due out shortly but which in 2013 reported average student debt as just under $20,000 and the median at around $13,000. That report includes debts which have been partially or mostly repaid. A students’ debt, unless they go overseas, will peak on graduation by which time more than a third of students said they expected to owe more than $30,000,” said Haines.
“Seventy-three percent (up considerably from 65% in 2011) expected their student loan to have a significant impact on their ability to save for their retirement, with just 5% expecting it to have no impact. This comes at a time when there has been considerable public debate about whether or not national superannuation will be available for this generation of students.”
“Seventy percent said they expected it to have an impact on their ability to buy a house; just 8% thought it would have no impact. Sixty-eight percent thought it would influence their decision to go overseas – of significant concern to not only their friends and families but also the future New Zealand economy.”
“We are particularly concerned that almost two in three students (65%) said that their student loan debt would have a significant impact on whether or not they would undertake further study. This shows the lie that removing student allowances from postgraduate students would do anything other than severely curtail this option.”
“Thirty-six percent, consistent with 2011, felt their student loan would affect their decision to have children, with 57% of these saying they would seek to wait until they were more financially secure before they considered becoming parents.”
“The current government has been relentless in its pursuit of student debtors, but these figures show that is the wrong approach. Whatever the makeup of the government after the election on Saturday, the issue of student debt needs to be addressed because the current situation is completely unsustainable,” said Haines.