Outrage over student allowance changes

October 2012


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The Government’s intention to remove eligibility for student allowances for postgraduate students has sparked an uproar among postgraduate students across New Zealand.


President of New Zealand Union of Students’ Associations (NZUSA)

Many questions were left begging in the wake of this year’s decision to unilaterally withdraw availability of the Student Allowance for postgraduate study undertaken by students at level 8 or above.

For its part, the NZUSA has shown particular concern for postgraduate students because we do not accept that they are an insignificant group of students and because we also believe the situation of postgraduate students is poorly understood.

Our first response on this issue was to support the position voiced in the health sector – by the New Zealand College of Clinical Psychologists and Allied Health Professional Associations’ Forum for instance – that a supported pathway to successful completion of postgraduate courses of study was clearly now at risk of being cut off.

This followed media coverage of the fear and uncertainty (more commonly known as disproportional anxiety) that this unheralded decision on the Student Allowance was creating for postgraduate students – especially those approaching their final years of study.

The architecture profession has also expressed its concerns that the supply of postgraduate architecture students will dry up and that more students will head to Australia.

The message from the Government is not to worry, on the basis that students are being given the option to take out further Student Loans via Inland Revenue and that they will be able to apply for welfare payments from the Ministry of Social Development such as the Accommodation Supplement.

This is a direction that our tertiary education institutions, who do at least cover some of the shortfall in postgraduate student support by way of scholarships, seem to have passively accepted.

Meanwhile, NZUSA has continued a conversation with representatives of Postgraduate Student Associations (PGSAs) to gauge their views and have also written to Steven Joyce, Minister for Tertiary Education, Skills and Employment, to seek clarification of the Government’s long-term intentions for postgraduate study.

PGSA representatives we have spoken with have expressed a range of valid concerns, and in the case of The University of Auckland PGSA, a detailed member survey is under way.

Many students are now wondering about taking on large loans, particularly if they are committing to study in disciplines or specialist fields of inquiry where the eventual employment opportunities are limited in terms of pay levels and career progression.

In its letter to the Minister, now awaiting a reply, NZUSA has queried the transparency of the number crunching that sits behind the decision on stripping the Student Allowance from postgraduate study.

We have expressed a raft of concerns to the Minister, including the risk of a decrease in the number and diversity of postgraduate students. Amongst our high-level questions to the Minister were these three questions:

1. By narrowly decoupling student support from postgraduate students, are you also increasing financial pressures that will undermine the conditions needed for producing high-quality research-led degrees that will drive innovation in our economy and society?

2. Will a negative impact on the ability of postgraduate students to complete their studies lead to an erosion of the international standing of the qualifications taught and/or supervised in higher education faculties in New Zealand?

3. At what point have there been projections that give you peace of mind that opportunities for postgraduate study will not become less accessible to Māori and Pasifika students as a result of pushing students towards the prospect of taking on more debt in a depressed economy?


Executive Member of Victoria University of Wellington’s Postgraduate Student’s Association

The VUW Postgraduate Students’ Association is gravely concerned about the likely consequences of the Government’s proposed changes to student loans and allowances for postgraduate students. In particular, the decision to withhold the student allowance from postgraduates undertaking study at NZQA level 8 or higher (except for honours students) threatens either to drive students further into debt if they borrow their living costs or else to spur them into seeking part-time employment while they study.

Given the catastrophically high level of private debt in New Zealand, and the paucity of jobs available to new graduates, we are concerned that increasing student debt still further will not only cause greater hardship to new graduates but will also be damaging in the long-term to the nation’s economic prosperity.

Maintaining the parental income threshold for the student allowance is also likely to compel postgraduates to seek paid work. PGSA has already received comments from a number of postgraduate students who do not qualify for the student allowance, and who have chosen to enter paid work rather than to add to their future debt-burden. All have expressed the view that working twenty or thirty hours a week is detrimental to their studies. This is especially problematic for students who are also responsible for children and young families. It is the view of PGSA that full-time postgraduate students should be able to devote their attention to their research without having to meet the demands of paid work simply in order to live.

Moreover, PGSA is concerned that the Government has formulated these policies with an eye to short-term fiscal gain, but with little regard for the long-term social and economic consequences these policies are likely to have. In particular, we are concerned that they will place a greater share of the burden of student living costs on scholarships offered by universities and that they will drive debt-laden students overseas upon graduation to seek higher-paying jobs abroad.

We already see the effects of high student debt, poor job prospects, and low incomes on graduate choices: a Ministry of Education study of last September shows that four years after graduating, a third of PhD students were already working overseas. This brain-drain is also a cash-drain, as New Zealand universities train the nation’s best and brightest only to see this investment disappear overseas.

The projected savings of $33 million over four years, which the Government expects to make by withholding the Student Allowance from postgraduate students, must be seen in the context of the significant costs to the country arising from greater student debt and from training students to work offshore. PGSA is concerned that these serious problems are likely only to be exacerbated by the Government’s new proposals.

PGSA is alarmed about the likely consequences of this move for universities, for research facilities, for employers seeking skilled staff, and for society as a whole. If tertiary education at higher levels is a public good, then restricting access to higher education by making its costs formidable can only be harmful in the long run.


President of the University of Canterbury Postgraduate Students’ Association.

The Government’s decision to withdraw eligibility for Student Allowance support from postgraduate students from 2013 onwards will have strong implications on the country’s future. This action seems to be directed at the immediate financial gain at the expense of long-term economic growth of the society.

First of all, this decision sends an instant message to young New Zealanders that postgraduate study is not valued by the Government, that the future of the young generation is currently not a priority. Too bad if certain disciplines (for example, ecology) offer poor employment opportunities in terms of pay and career progression to the holders of a Bachelor’s degree. 

Secondly, this decision heavily impacts on the students who embarked on postgraduate study counting on the Student Allowance availability. What are they to do now? Get into more debt, as if they do not already have a hefty student loan? Quit the study mid-way, which (to me) seems like a waste of the student’s time and the university resources? Work part-time, delaying graduation further and taking up additional student loan to finance the extended period of study?

Thirdly, the load of financing postgraduate study falls onto the universities and the industry. How are the universities, which are also facing financial difficulties, expected to come up with funding for postgraduates? Maybe not? As far as I know, the University of Canterbury will not be increasing the amount of UC-funded doctoral scholarships in 2013. This may decrease the amount of research done in the public domain as the universities rely on the inexpensive postgraduate student labour to conduct much of their research. There is also a demographic dilemma. At present, the numbers of Kiwi and international postgrads at Canterbury are roughly proportional, but with the three quarters of the UC doctoral scholarships going to international students in the July 2012 round, UC may face a change in the postgraduate student demographic very soon.

How the National Government is going to address these issues remains to be seen, but I hope it has a good backup plan and a bunch of capable risk analysts on board because the country’s future is at stake.