Other issues raised in submissions

Requiring borrowers to pay a deposit for each student loan application

Submission

(Lucy Thomson-Ryan)

Borrowers should be required to pay a deposit for each student loan application (based on a percentage of the application) similar to that for a home loan. Requiring a deposit would make borrowers aware of the value of the loan, how the money world works and curb their financial spending. This proposal would also reduce the financial burden on New Zealand.

Comment

The submission is beyond the scope of the bill.

The recommendations made relate to student loan eligibility and are not within the ambit of the changes proposed in the bill which are to improve Inland Revenue’s processes for collecting student loan repayments. Furthermore, there is a risk that any requirement for an upfront payment may pose a financial barrier to people accessing tertiary education. This would be contrary to the objectives of the Student Loan Scheme.

Recommendation

That the submission be declined.

Lifetime limit on accessing student loan funding

Submission

(Nathan James Ngatai)

The submitter refers to two Budget 2010 initiatives – the student loan 7 equivalent full-time study[2] life-time limit and the performance test.

The submitter supports interest-free loans for borrowers who remain in New Zealand and the student loan performance test. The student loan life-time limit is also supported but the submitter suggests that some accommodation be made for life-long learning.

Comment

The submission is beyond the scope of the bill.

The student loan performance test and life-time limit were part of Budget 2010 changes and were introduced on 1 January 2011. Legislation was not required as all decisions on entitlement and eligibility criteria for a student loan are made by Cabinet and incorporated into the student loan contract.

Recommendation

That the submission be declined

Further assistance to students

Submission

(National Council of Women of New Zealand)

The Government should investigate the feasibility of implementing a universal basic income, providing students with a living allowance during study periods. These changes would mean that no one would need to borrow to get an education and it would be an investment in the future.

Comment

The submission is beyond the scope of the bill.

Recommendation

That the submission be declined.

2 A student taking a normal year’s full-time study generates an “equivalent full-time student” unit.