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Student loan penalties

Written By: - Date published: 7:09 am, August 12th, 2010 - 75 comments
Categories: education - Tags: , ,

Education should be free. I think student loans are among the stupidest things that NZ governments (from both sides of the political fence) have ever done. It should be possible for the average young Kiwi to gain a tertiary education without having to shoulder a crushing burden of debt. It is intergenerational theft.

One of the worst effects of student loans is to drive young graduates overseas. We spend tens of thousands of tax payer’s dollars on their excellent education, and then build in a huge financial incentive for them to leave this country and never come back. What could possibly be stupider?

The last Labour government at least made a start on addressing this problem with interest free loans. (They should have done so much more than that!) National will be letting fees rise and making the situation worse. But at least it appears that they are going to do one small thing right, and it’s grand to be able to congratulate them (for a change) on this announcement yesterday:

The Government is to reduce late repayment penalties for student loan “refugees” staying overseas because of their student debt, Revenue Minister Peter Dunne says.

Speaking at Auckland University of Technology yesterday Mr Dunne said the student loan scheme “could burden New Zealand graduates on OE (overseas experience) with such enormous penalties they were effectively barred from ever returning to New Zealand”.

“A measure soon to be introduced will reduce the penalties to address this issue.”

That article doesn’t have any specific numbers other than the total cost of unpaid penalties, $56.6 million. But let’s hope that the reductions are significant. Better still, write the penalties off all together. Let them come home.

75 comments on “Student loan penalties ”

  1. Jenny 1

    R0B I agree with your first statement:

    Education should be free.

    As is well known the treacherous individuals who brought this policy in, all had had the benefit of free tertiary education.

    • Jenny 1.1

      Fully government funded public tertiary education is possible. Its return in New Zealand is only a matter of political will. A number of countries around the world continue a long tradition of free public tertiary education system, while others are very close to having a fully funded system. Free higher educaton in Finland is a constitutionally protected right. New Zealand’s fees, however, are unusually high and are an absolute social injustice…….

      The above quote is from the NZUSA, The New Zealand University Students Association.
      The NZUSA goes on to explain in their, ‘ A short history of fees in New Zealand’ essay, that:

      Until 1989, fees for domestic students in New Zealand were very low. In 1989, the fee for full-time study at a New Zealand uiversity was less than $300. However, for most students, 90% of that cost was met by the government through a fees grant, which was paid through the student support system.
      Labour introduced the flat $1250 standard tertiary fee for full-time and full year students in 1990. Phil Goff, currently a Labour Cabinet Minister and the then Associate Minister of Education, responsible for tertiary education, was responsible for introducing tertiary fees.

      In an interesting footnote; As Professor Terry Crooks head of Educational Monitoring at Otago University, points out – Finland as well as constitutionally banning tertiary fees is also an international powerhouse in primary education, achieving great success, by fully supporting teachers and eschewing standardised testing. A shining example in primary education that the National Government blinded by ideology, has chosen to ignore.

      Professor Crooks on Finnish primary education:

      “There is no individualised accounting, and there is also, no school accountability measures. They put the investment in quality teaching and quality teaching education. And then they trust teachers to do the best job’.

      Finland, has a similar sized population as New Zealand, so there is no reason why we can’t follow their positive examples of how to do it right, in both primary and tertiary education.

      The only thing stopping us, is the ideological blindness and lack of political will from, as R0B puts it, “both sides of the political fence”.

      capcha – value

  2. Carol 2

    IMO, a lot of the problem is that governments and economists tend to treat education, especially tertiary education as only being of benefit to the individuals being educated, and a financial burden on the state in paying for it. And, as with so many other things, they take a short term view on the costs in financing this education.

    Has anyone done any figures to work out the financial/economic benefits to society or the country in having a educated and skilled citizens? And taking into account the long term benefits? Because, as many here probaby know, this education and training is an investment for the country and not a consumer service/choice.

  3. KJT 3

    Tertiary education was not free. it was paid for by taxes on tradespeople, labourers and others who paid for their tertiary education themselves or did not have any.
    It was only open to the children of the rich. Student loans allow many more people to go to University.
    Normally I do not agree with user pays for public goods, but this is partly a private good and partly public. If anyone benefits apart from the student it is the companies who employ them.
    It is an indictment on the meanness that has been instilled in people by neo-libs that students do not feel they have to give something back.
    Our best go overseas not because of student loans, but because we are a low wage high cost country after decades of inflation in everything except wages.
    There is no one left in my profession except trainees, immigrants who are trying to get into Australia or who like the NZ lifestyle and social benefits and over 50’s. They left because they are paid twice as much even in third world countries than they are here.
    They left because our society is being destroyed by stupid politicians with stupid experiments.
    They left because we pay bean counters 100’s of thousands (those whose only skills are juggling money, cost cutting and asset stripping) while reducing the wages of skilled technicians, engineers, doctors, teachers, tradespeople, the ones who do the work.
    The ones who did not have student loans have left.
    The ones who do have student loans left also.

    • r0b 3.1

      It was only open to the children of the rich

      Haven’t time to chat on your other points right now, but I’ll tell you from personal experience that that one there is wrong.

      • burt 3.1.1

        Wrong in theory or wrong from a practical point of view?

        Sure anyone could go, how many low income families could afford to support their children through tertiary education before student loans. Do you have access to the tertiary participation rates before the introduction of student loans ?

        It’s interesting that you support the concept of affirmative action in Uni and claim that there was no fiscal barrier before student loans….

        • Lats

          Speaking from personal experience, in my day I got student jobs during the holidays in order to help cover the costs. Certainly my parents chipped in some, but I met the majority of the costs myself. Mind you, back then the course fees charged to students were only a few hundred dollars, I guess they were heavily subsidised by govt, fees now are outrageously high. Accomodation and beer money were my biggest expenses, thats what the holiday jobs were for. 🙂

        • chris

          To be honest there needs to be a balance because yeah, burt et al are right. My dad wanted to do medicine and had the grades to get into Otago, but didn’t go in the end and instead went into a cadetship at NZ post, because he was going to get paid and because his parents were working class and couldn’t afford to send him to University. He now holds a masters degree, but again, that was probably only available to him because of student loans as well.

          One also need only look at france/germany where education is supposedly free, but only for the best of the best from school. They segregate their classes at a very early age and if you’re not performing at a young age then you don’t even get the chance at getting a good high school education. Perhaps this system has merits, but I believe the solution in NZ is not to follow the European route. I think something that is our own – like reducing your loan each year based on your grade average over B+.

          Education is a social positive, but making it free creates unlimited demand which merely creates incredibly selective universities. That is a good thing in some ways, but not all. I think the system needs to reward good performance at university – but in Joyce’s backwards-ass requiring a job way.

        • In The KNow

          When we had ‘free’ Tertiary education, before Student Loans, it was easy to get a part time job to cover our living expenses. I had absolutely no help, financially, from my parents and not only happily studied full time, worked part time, lived independently in a flat, ran a car AND saved money! The only costs I had to stump up with the study was the Student Association fee of (if I remember correctly) $151 and, of course, my books etc.

          There were very few students back then who could not easily support themselves with a part time job (which were plentiful) without financial help from parents. Tertiary study back then was afforable and accessible and not as stressful as it appears to be today.

          That is not the case today due to study and living costs being so expensive and I worry for my children who are studying and living under the shadow of Student Loans and their personal living costs which, even though I am not working right now, help them with by giving them basics such as toilet paper, washing powder and cheese (not in their food budget cos it is too expensive).

          • Bill

            “..basics such as toilet paper, washing powder and cheese (not in their food budget cos it is too expensive).”

            Your kids eat washing powder and toilet paper? My god! Did your university education teach you nothing? The toilet paper is meant only for the utilisation of the cardboard holder to make impromptu pipes and the washing powder is for the tooting. What university you go to again? No wonder it was free.

      • Armchair Critic 3.1.2

        Too right, r0b, I got into university with my parents’ combined income being less than half the average wage. Before student loans were invented.
        Believe it or not, I got in based on my grades at high school.

      • Macro 3.1.3

        Totally agree rOb my dad was a factory worker – never made it past Primary education in the UK. But then there was more equality in NZ in those days – something that younger generations find it hard to get their heads around.

      • Puddleglum 3.1.4

        A similar experience.

        My dad was an assembly worker, 12 hour shifts, five and a half day weeks. Mum worked as a machinist in a shirt factory. I got into university in the late 70s with a bursary, full waiver of fees plus about $500 for the year.

        My parents supported me. In other words, I stayed at home and ate bangers and mash, homemade chips and peas, etc.. I had holiday jobs but what I paid in board wouldn’t have covered the costs of housing and feeding me.

        If I remember rightly, at the time I was one of about 3% of university students whose father was unskilled. The reasons for lack of participation of working class youth was not the lack of student loans so much as the lack of that middle class valuing of education – aspiration, if you like. But the next question needs to be asked: Why was that?

        So far as I can guess, three things at least.

        First, there were plenty of pretty well paid jobs around. In 1973, when I started high school there was, for a brief time, no-one unemployed in Christchurch, if my memory is correct. When there are relatively well paid jobs for 15 year olds and when the society is not too inequitable it’s not obvious to a working class family why they should encourage their child to go to university and enter a completely different world and cultural situation. Remember, when you’re from the working class, the middle class and its ways, its ‘professions’ and its concerns is a foreign country.

        My mum was like that. She would have had us all out to work at 15, bringing in an income if she’d had her way. She didn’t. Dad had always valued education as the means of improving his children’s prospects. He didn’t want us to end up in the conditions and with the powerlessness that he experienced when he was a child in the north of England in the depression. (There’s an interesting back story, too, about how dad gained that middle class valuing of education – another time maybe).

        Second, generations – and, in some cases, centuries – of inculcation of that strange mix of working class passivity and ‘knowing your place’ meant (and probably still means) that most working class parents would have, quite rightly, seen having educated children as basically making their offspring strangers to them, with strange values. It just wouldn’t have seemed ‘natural’ to encourage your own child to go to university. It’s not unlike the way that schools and education have undermined cultures in colonised countries. Schools turn out quite different people from those the culture turns out. Why hand over your children to foreigners?

        Third, powerful institutions both create and coalesce around these historical processes of cultural inculcation. Schooling, in particular, structurally reflected it with some high schools not having seventh forms and so reflecting back at its pupils the reality of the lack of expectation. Some high schools were just known as ones where no-one moved on to university. Other schools, by contrast, were ones that were the feeders for university.

        My father rocked up to one of these schools on a rainy winters day in his mac, on his bike, during his lunch break, to ask for an application form for my brother. What guts. The secretary, when she heard his request and saw him, said, “You do know that we have very high academic standards at this school?” It was only when dad mentioned the intermediate school and then the particular class and teacher that my brother was in that she handed over the application form. My brother got in on merit. I got in a few years later because I was his brother – that kind of a school.

        I don’t think student loans have anything to do with helping the working class into tertiary education. Free education wasn’t the problem then (so far as working class participation goes) and it wouldn’t be now. What makes anyone think that working class people like the idea of being in debt from their first day of work? Let’s have free tertiary education for anyone who wants it and can do it and let’s pay the taxes to make it happen. If our society is that complicated that people need to spend fifteen years, minimum, in education to get decent work and remuneration then we have to pay the price for that complication. There’s no such thing as a free lunch.

        • felix

          I’m enjoying your writing here, Puddlegum. Hope you do share that story about your Dad sometime too.

          • Carol

            Thanks, Puddleglum, for confirming my thoughts that uni education was a very middleclass affair in the 70s, and for telling it in such a human and clear way.

            I always thought about 1-3% of the population went to Uni to do a degree. So it was a very elitist enterprise. It still tends to be that way, even though the proportion of the population attending has increased. I just looked at the Word doc. “Tertiary Education of New Zealand; a census analysis”


            It shows a shift (a drop) from 1981-2006 from 50% with no qualification (including no school qualification) to just over 26% with no qualification in 2006.
            The “Bachelors degree or higher” hasn’t grown that much as a proportion of the population: from around 3% in 1981 to around 12 or 13% in 2006 – but it has increased about 400%.

            And “Non-degree Tertiary Qualification” has also grown: around 12% in 1981 to approximately 20% in 2006.

            So overall proportion of the population with tertiary qualifications have gone from 15% in 1981 to 33% in 2006.

            This shows a couple of things:
            Uni education is still a pretty elitist endeavour (and probably still favours those at higher socio-economic levels).
            It shows why funding has become an issue because of the big increase in attendance at tertiary education.

            But, I agree with Puddleglum:

            Let’s have free tertiary education for anyone who wants it and can do it and let’s pay the taxes to make it happen. If our society is that complicated that people need to spend fifteen years, minimum, in education to get decent work and remuneration then we have to pay the price for that complication. There’s no such thing as a free lunch.

            Stats on the above page, and here:

            also show the big increase in women going to tertiary education.

          • Puddleglum

            Thanks Felix – appreciated and very much reciprocated.

            So far as Dad’s story goes, if I didn’t know it was true, I’d think it was written by Dickens – characterisations like caricatures, almost too-contrived plots, social commentary in every detail and lashings of sentimentality. But in a strange sort of way, I see it as expressive of something at the centre of this thread.

            It all started in the 1910s with “she was only a banker’s daughter” but she strayed into a chorus line, got disowned and landed up in a working class area of a small northern town with only a handful of working class males willing to keep her company … but, as they say, you can take the girl out of the middle class but you can’t take the middle class out of the girl.

            Enter stage (emphatically) LEFT, the youngest, favourite son (probably from the favourite father) – ‘cock of the school’ by day (which has something to do with steel capped boots, concrete schoolyards and ‘first to draw blood’ rules), poring over books and political tracts by night and by candlelight (no gas or electric lighting).

            His middle class Mum was determined that he should learn from books. He ate them – slowly. (Today he’d be called a dyslexic I suppose though I remember him working his way through ‘The Rise and Fall of the Third Reich’ – dwelling on the politics, not the battles – and the Memoirs of Khruschev (sp?). No small feats, if you’ve ever seen them on a bookshelf.)

            The boy leaves the Communist Party at age 13 after hearing Harry Pollock in Manchester just before the impending war, calling for sabotage of armaments factories – a war that dad knew men in his derelict, infamous street, would soon be fighting, with blanks if Pollock had his way (at least, that’s what he took from it).

            As he leaves the hall he sings ‘Rule Britannia’, or some such, and takes half the young communists from his branch with him.

            He leaves school at 14 but he never abandons socialism which he sees as the straightforward expression of the virtues – as opposed to the many vices – of his working class world: Loyalty, responsibility to and respect for yourself and others, honesty, fairness, sharing, helping, working hard, putting family and children first, being as good as your word, sticking together, pulling your weight.

            If revolution wasn’t going to happen (in Dad’s time it came close more than once), then education would have to be the next great hope.

            Decades passed. We migrated to Oz, then on to NZ mainly so we (the kids) could get the best opportunities for education. It was his middle class mother echoing down the years, I think. He could probably have had a life in local politics in England – it was looking promising. Coming to NZ (for us) meant he had a life in factories instead.

            Dad died eight years ago from mesothelioma, an industrial disease – fitting I guess, even symbolic, but bloody awful. I asked him, a few weeks before he died, whether he was angry at the companies that had exposed him to asbestos. He said, “No – nobody knew then.”

            I didn’t tell him that I’d read about asbestos companies being aware of the health hazards of asbestos and that they’d suppressed that knowledge. That was in the 1930s, the decade after he was born.

            That’s the problem with getting educated – you learn too much.

    • burt 3.2

      Hopefully this little bit of reality will be an ahhh-ha moment for rOb.

    • just saying 3.3

      I was going to write something on some of the points you make, particularly about the (already hugely subsidised) public costs of educating those whose qualifications will all but guarantee incomes many times the national average. From the working class point of view, almost a license to print money, especially when taken overseas.

      I’m an exception too Rob, and there are many exceptions. As a proprtion of university students, especially in the high earner courses though, there are bugger all. University is an overwhelming middle class (and up) pursuit.

      In a more ideal world free education should definitely be free. In this one, in many cases, it has the potential to increase inequality

      • Draco T Bastard 3.3.1

        It’s the irrational “free-market” that increases inequality – not increased education.

    • Lats 3.4

      I don’t agree with everything you say here KJT, but I do agree that we as a society set strange values on certain professions. Successive governments have waxed lyrical about our wonderful knowledge economy, but the marketplace doesn’t always reflect the rose-tinted view of the politicians. I graduated with a science degree and a post-grad qualification. I spent nearly 20 years working in the microbiology field, and in that entire time I never once earned the average wage, let alone many times more than that as others here claim. To contrast this, a school mate of mine went straight from 7th form to work in a bank, worked his way up through the ranks, and is now in senior management at one of the big banks in Aussie, earning about $200k. To be fair he has a much more responsible position than I ever had (in terms of staff under him and financial responsibility) and I don’t begrudge him the income. On the contrary, I wholly applaud his good fortune. However it is a little disappointing that I wasted those 4 years getting my qualifications when I could have been whoring myself to some big corporate and raking in the dough. I’ve recently retrained (and now have a student loan) in IT, and my first entry level job is already getting me more than I have ever earned before, and this after a 1 year certificate course.

      I guess the take home message here is that while some benefit greatly from a university education, not all fields of study guarantee a massive income after graduating.

      • just saying 3.4.1


        I didn’t claim that microbiology pays “many times the average wage”.

        I agree with the principle of free tertiary education. But there are some instances where the community pays a huge price for particular ‘elite’ university trade training such as medicine and dentistry, where, too often, the beneficiaries, give little or nothing back to their communities, and are not obliged to. And they have a sense of grievance at small proportion of fees they need to get a loan to fund themselves. In effect, it’s a kind of upper-middle class welfare with the qualifications that bring big incomes.

        The currently in-vogue beneficiary-bashing is never directed at the rich and privileged benes.

        • Lats

          I’m glad you didn’t claim that, because it would have been fundamentally untrue 🙂 But you did say:

          I was going to write something on some of the points you make, particularly about the (already hugely subsidised) public costs of educating those whose qualifications will all but guarantee incomes many times the national average.

          I was simply pointing out that a university education doesn’t necessarily guarantee an income many times the national average. Certainly those with a tertiary education will, on average, receive higher incomes, but you made a generalisation that I simply had to challenge 😉 I understand now that you were targetting medicine, dentistry, etc., but I’m not sure it is fair to say they give nothing back to their communities. Sure, if they disappear off overseas and avoid paying their student loans, you are quite correct. But a lot will stay in NZ and join practices, and contribute their expertise while paying off their loans.

          I do tend to favour the view that the country as a whole benefits from a greater number of graduates, and I would love for us to return to the model of funding I personally enjoyed in the 80’s. I’m not convinced, though, that it is affordable any longer. If we started fully funding tertiary education again the money has to come from somewhere, and another area of funding would end up suffering. Unless of course we consider raising taxes to cover the cost.

          • just saying

            Apologies Lats.

            Rereading that original post, I really wasn’t clear.

            Will make a big effort to be clear and specific in the future!

            I was talking about a minority of tertiary students who are able to earn big bucks on the back of upper-middle class welfare, and apologise to the many, many, current and former tertiary students, that I inadvertantly insulted through the sloppy way I expressed myself.

            • Lats

              No need to apologise. I wasn’t insulted at all 🙂

              And NickS is quite right, a science career in this country (unless you have a PhD) is very much a labour of love. I did my degree because I found it interesting and (don’t hate me for this) quite easy. If I had been focussed on future earning potential I would have sold my soul and pursued a different field like some of my friends.

              • lprent

                Don’t worry. Just having a science degree has helped a hell of a lot in my subsequent careers – none of which have anything to directly to do with science. Just today I was using a pile of my 2nd year maths to figure out how to recode a algorithmic nightmare in a more efficient manner. In my last job I was using a hell of a lot of physics, material science, and for that matter the queuing theory from my MBA – all for building code.

                Personally, I found that each degree after I did it, proved to be the thing that moved me on to a completely different career than the one I studied. Which is why I never completed a compsci degree. The 3rd year papers convinced me that I’d learn more from books and contracts.

                BTW: Vocational degrees are really for the dweebs as far as I’m concerned..

              • NickS

                Heh, I sort of find everything easy, (excepting maths, but that’s what math101 is for…), it’s just that I’m crap at studying enough and the last few years have been borked due to depression. /sigh

                If I didn’t find evolution, ecology and molecular bio so interesting though, I’d probably have gone for organic chemistry, or geology.

      • NickS 3.4.2

        Yeah, unfortunately science is more of a labour of love (and low-level poverty), than a well paying career unless your degree is “industry focused”, and the under funding of R&D in NZ doesn’t help either. Since a simple BSc wont get you much if anything at all 🙁

        • lprent

          PhD minimum is what I see. Anything less and you’re lucky to get a job as a lab-rat bottle washer.

          • NickS

            Yeah, most of the jobs that are opened with a BSc are basically scut-work, though the pay is generally above minimum wage. It’s just that you end up competing with the MSc, Post.Grad.Dip.Sci and BSc.Hon students. All of whom generally have more lab and field experience.

            • Lats

              Yep, Dip.Sci, that’s me, I got bored half-way through my masters and decided I’d rather be working for money. And the first lab job I applied for was as a “lab-rat bottle washer” (nice turn of phrase there). Luckily the same lab was also about to advertise for a bench technician, so I ended up getting that job instead. Stayed there 9 years & made some excellent friends. Was testing dairy products, and to this day still can’t eat custard.

  4. Shona 4

    Bollocks KJT !My family wasn’t rich. All but one of us had a tertiary education.No student allowance in the 1970’s but no loan either. All trade training was govt. subsidised until Rogernomics fucked us over.

    • burt 4.1

      Define ‘wasn’t rich’. Apparently $70,000/annum is rich when talking about tax but poor when talking about welfare entitlements. All very confusing when an ideology defines rich rather than actual financial status.

      • Draco T Bastard 4.1.1

        The ideology you’re talking about is neo-liberalism and the “flat tax” that Rogernomics tried to bring in and which has been shown to be a complete failure.

    • Carol 4.2

      In some ways uni was easier in the 70s than it is now, but it wasn’t all that rosy. I think it was possible for people from less well-off backgrounds to go to uni. But I’m pretty certain that the majority of students were from middle and upperclass backgrounds. And the majority were male.

      I began my first degree in the early 70s. I would have been dependent on my parents if I had done fulltime Uni, not so much for fees, but for cost of living. I went to Teachers’ College instead, which got a state grant and started uni parttime at the same time. I continued uni part-time while working, partly funded by my employer, the Education Dept. (or whatever it was called at the time). I finished this degree with a fulltime year in 1976. I got a student allowance that year, which didn’t quite cover my rent. The rest of my bills were paid from the money I’d saved while working.

      There may not have been fees of any consequence. There was some student allowance. Some people had scholarships. But most students had to work parttime and/or in the holidays to support themselves. The freezing works was a major employer of male students in their summer holidays.

      It’s important to remember that there are some significant changes since the 70s. Tertiary education has expanded vastly. A much higher proportion of young people need some tertiary qualification/s in order to get a job. And a noticeble difference walking around Auckland Uni campus now is that far more women go to Uni thank in the 70s.

      • lprent 4.2.1

        I first did uni in the late 70’s. The student allowance was almost enough to cover my rent in Hamilton, but not enough for food and texts. I worked at the Hillcrest as a barman for 4 nights a week and did a lot of territorials during the weekends when I wasn’t off on field trips (there were a lot of those in earth sciences). Short holidays I’d carry on doing barwork or army. Over the xmas break I’d work fulltime (year 1 = auckland factory nightshift, year 2 = hamilton barwork, and year 3 = pipeworks in Marton).

        I got a management scholarship for Ceramco in my final year (after I’d decided against science as a career). The money for books made life a lot easier.

        But it wasn’t all that easy, and I couldn’t just keep accumulating a loan (which would have been a lot easier whilst at uni)…. On the other hand I got out of uni owing just a grand to my parents

        • purplescottie

          My university experience was the early 70s. We got a student allowance that covered food and rent. A bursary, if we passed the exam, gave us a bit of extra pocket money to cover books. Christmas holiday jobs were plentiful, and more than covered the fees. My fees were around $190 total for the year. In my experience, everyone who had University Entrance could afford to go. Didn’t matter what your parents earned.
          And my cohort introduced higher fees and student loans!

          • Rosy

            In the 70s when I left school at 15, I didn’t even know what a university was. Never heard of it. It might not matter what parents earned, but the circles they moved in, their priorities mattered an awful lot, just as they do today. Since then I’ve managed to fit in a degree here and there in-between working and raising children. My father’s comment after my Masters was that I was too qualified to get a job!

            In the workforce there was some discrimination – if you admit to getting in university without prerequisites there was an expectation of failure (sometimes noted when people were surprised at the quality of work done) or the degree was seen as a hobby even if it was done full-time, and in time.

  5. KJT 5

    My trade training was paid for by my employer and myself in the mid 70’s.
    It was quite hard to get into trade training. 3 out of 100 applicants for mine.
    As regards inter generational theft my tax was half my income and mortgage repayments took all of my wife’s income. This was to pay for Muldoons election bribes to the then superannuates and social welfare for farmers as well as free education for the children of the rich so they could infest the ski fields. We kept trying to vote him out, but the electoral boundaries were gerrymandered to favour National.
    National have a long history of stuffing up, only exceeded by the 84 Labour Government.
    All my siblings went to university, but it was a big financial struggle for them. They would have liked the opportunity to add some student loan money rather than working every spare hour.
    You can now get student loans and allowances for trade training also which would be an improvement except that employers have taken the opportunity to get out of paying training altogether.

    • loota 5.1

      except that employers have taken the opportunity to get out of paying training altogether.

      Indeed, and look how well that strategy is serving them in terms of being able to recruit and retain skilled staff versus having them take off to Oz. Classic NZ short-termism.

      • KJT 5.1.1

        Of course.

      • Jenny 5.1.2

        Loota, the idiocy of allowing employers to dodge training up new trades people, is about to get worse with the 90 day bill.

        One of the glowing commendations for the 90 day law, that was supplied by the EMA, in defence of this law, was from an employer, who bragged that rather than having to train a new start for his factory he could hire and fire people at will until he found one with all the skills needed for the job already in place.

        Talk about an anti-education government.

        I suppose it is all about hollowing out the real economy so that New Zealand can become the finance hub of the world. Can I have the Irony detecter please.

        Indulging in this sort of parasitism meant this employer got a competitive advantage over his business rivals by avoiding the costs of training someone in the job. Obviously, what all this will mean, is that eventually, no new starts can expect to be shown how to do the job properly.

        I suppose a young working person hoping to improve their position, could seek to do extra training at night school on their own time and at their own expense.

        Apart from that employers could hire workers trained overseas.

    • Rosy 5.2

      In the 70s tertiary education may have been universtiy only but as Shona says, since the ‘reforms’ industry stopped paying for trade training and student loans became the only way for many to get the training they needed for jobs. In my family alone we have student loans for IT, design, hospitality and house-painting forgoodnessake! It’s not just university students who are paying off loans! And how do you think a house-painter was going to pay off an interest-bearing loan? Until Labour cancelled interest (yes, I know it was an election bribe) for some of these people the loans just kept accruing – earning enough to have to make payments but never enough to stop the debt rising.

  6. shona 6

    Block courses for trades transport to them and accomodation were all govt. subsidised.So was work gear. Employers made a substantial contribution some of which was able to be claimed back on taxes. And they got cheap labour.Tertiary education or nursing was often the only option for women. Skilled office administration was highly competitive and preferred mature workers. The opportunity for study was a chance for a positive direction in life. User pays was a marketing tool to cover up the neolibs massive underfunding of education. We are now reaping the result of that greed. The student loan scheme was always unsustainable.

    • Carol 6.1

      User pays was a marketing tool to cover up the neolibs massive underfunding of education. We are now reaping the result of that greed. The student loan scheme was always unsustainable.

      I agree with this. But it is also important to remember that this happened at a time when tertiary education was expanding, and thus required more funding than previously. However, rather than acknowledge that this expansion in education was/is an investment for the future, the neolibs just threw up their hands in horror at the increased costs and reached for the “user pays” mantra.

      • burt 6.1.1

        Or it was because the Labour govt left the economy in ruins in 1990 and National had two choices – send the uni staff home and shut them down or find another way to fund it. We coined the phrase ‘failed policies of the 90’s’ to hide the misery created during the 80’s – to shift the blame for political reasons.

        • Pascal's bookie

          Who do you think people mean when they say ‘neo libs’ burt?

          For someone who rages against partisanship, you sure have some blind spots.

          • burt

            By 1990 the temporary Labour neo libs were over their tea break and on their track back to the good old ways that won elections in the 70’s. They handed National a basket case economy that didn’t know if it was Arther or Marthe.

            That is the context for the failed policies of the 90’s.

            • felix

              So it was those – what, 2 years? – that ruined all Roger’s good work, and ruined everything for Ruth too. And for that other chap.

              And if it weren’t for whatever the Labour govt did in those last couple of years (which was what exactly?) it all would’ve worked out hunky dory.

              Is that really what you’re saying?

            • Pascal's bookie

              Weird. Deeply.

            • KJT

              Funny that UK, US and NZ. The countries that went furthest down the neo-lib track are all heading to be basket cases. Even the blind like Garth George are starting to notice.
              The ones that did not are still doing OK, especially the Aussies. and do not say it is the minerals. That is crap.

        • KJT

          Neo-libs were both parties Burt.

          Much as I dislike neo-lib religion some of the things done in 1984 were necessary. Removing overgenerous subsidies to farmers and business was one. Making access to tertiary education easier was another.

          What they did wrong was they not only threw out the bathwater, (Which was necessary) but also the baby and the bath. When dogma substituted for reality.

  7. randal 7

    whats even worse is when you book up a few grands worth and then you cant get a job even when you have been hightly trained and have specialist skills.
    they dont care about that.

    • KJT 7.1

      My sympathy, but having to pay part of the cost makes people think about the real value of their education and what they are doing it for.

      You could say it is still too cheap when people go on things like dive instructor courses training endless dive instructors.

      I do not think there is much public good in the endless stream of law and commerce graduates.

      There is an argument that courses such as science, medicine, engineering and teaching, where we need a greater level of skills, should be subsidised more as the resulting income is less while the public benefits are greater.

      • Carol 7.1.1

        But relating funding of unis totally to job outcomes follows a line that came in with the neoliberal turn: ie that education is solely about preparing for work.

        Prior to that there was a broader view of education being for all aspects of life, including citizenship, and an education to participate knowledgeably & critically in a democracy.

  8. KJT 8

    I agree that interest free was an excellent idea, but I still think it is fair on others for students to pay part of the costs. Having student loans also allows students money to live on so poorer students do not have to work their way through training. They can defer the costs until they are working.

    Penalties preventing those overseas from coming back is a red herring. Are the people who are too selfish to pay back a share of the education we, mostly, paid for while earning an excellent income overseas the types we actually want back. We have enough me me types already.

    When I was an employer I did train people.
    I got back the cost many times in loyalty and hard work from them.
    Part of the problem though is customers kick up when they are billed for an apprentice. They do not seem to realise that having a gofer allows a trades person to do the job much faster, So the total bill would probably have been higher without one..
    The other one is the academic requirements for trade training have been increased so much that you keep losing them from the job. I do not see in many cases that the academic part of the training actually adds anything rather than costs to the employer and trainee and “bums on seats” for all these tertiary institutions that have sprung up. You learn to paint houses by painting houses under the supervision of someone who knows how to paint houses. You learn how to run a business by running a business. Not by sitting in a classroom.

    • Rosy 8.1

      Agreed, shared cost is not a problem. Also agree on-the-job training is essential to develop good tradespeople.
      In 2009 of 125,962 industry trainees were in training. (down from 133,303 in 2008) with only 12,121 in ‘modern apprenticeships’ – down a hundred on the previous year.

      I suggest employers are wanting the students to train to get the job, rather than providing training on the job and the vast majority of these students have student loans, and the vast majority of employers do not share the costs of getting skilled tradespeople.

      And we still talk about student loans as if they’re for rich university kids who will earn enough to easily pay them back.

      • KJT 8.1.1

        Or the majority of tradespeople now are not earning enough to pay for training and absences compared with the days when a good tradesperson and apprentice could make a decent living.

        However I found training my own people was better than training a graduate who had to have all the BS removed before they could do useful work.

        I used to get lawyers who charge out at 600 an hour complaining about paying 45 an hour.
        They would prattle about overheads and their training costs whereas both were much higher for me than for them.

  9. ZB 9

    The issue is just one of many where the parliament enact draconian laws that funnel citizens into crime, debt, lying…
    …and there is little recourse for individuals to rectify matters until the policy has fully turd bloomed beyond even the intransidient far right nutter media can ‘clean up’ the turd blossom’.

    Like a capital gains tax, without which our economy cannot turn and face the new economy. How anyone can trust the NZ dollar when piles of junk NZ dollars accure in accounts daily by avoiding tax I don’t know! Our economies taxation system is woefully inefficient, and one reaosn for the student debt burden was because there was no capital gains tax and students would reap great rewards staying in NZ without a capital gains tax!

  10. Draco T Bastard 10

    The student existing loans should be written off, university fees dropped and a universal student allowance brought in – one equivalent to the UB. University libraries transferred over to e-book format and made available to everyone via the internet which should, at least, save on book costs as students won’t have to buy books. Make the reading lists for courses, lectures (Streamed/available for download) and exams available online as well (without needing to register), and you would probably see less people going to university and more people being educated.

    People seem to be holding on to the 19th/20th century idea of university education – this is the 21st century and things have changed. The most successful people tend to be self educated and what holds most people back there is that they just can’t access the resources as they don’t have the funds.

    • Lanthanide 10.1

      “University libraries transferred over to e-book format and made available to everyone via the internet which should, at least, save on book costs as students won’t have to buy books.”

      ’cause that just happens overnight with the wave of a magic wand, and doesn’t cost anything to implement at all? And, all textbooks that students use in courses are provided by the government, not international textbook publishers that actually want to make a profit when they sell books. Oh wait.

      • Draco T Bastard 10.1.1

        That’s the way it is ATM due to the failed system called capitalism. We need to change the system.

        • KJT

          Capitalism works fine so long as one sector does not have monopoly control. We control it, not finance houses.

          However democratic control is not likely when both our major parties follow the myth of representative democracy. Change your dictatorship every 3 years.

          And the party in power has a figurehead hand picked from the finance industry ranks.

          • Draco T Bastard

            Capitalism doesn’t work as it removes decision making from the majority of people (it is inherently dictatorial) and then also removes accountability from those who make the decisions allowing, and even encouraging, corruption (See the actions of Double Dipton). Then, of course, there’s the fact that it’s pretty much destroyed our ecology to make a few people richer.

            Anyway that you measure it, capitalism is a failure.

    • Carol 10.2

      Increasingly Uni libraries have e-books and ejournals. But, yes they cost the library. And usually the licence for an ebook enables only a small number of people to access them at any one time (about 3 or 4 people).

      Currently the whole international Uni system/networks have been neo-liberalised. So lecturers need to be continually publishing – it’s a market system. Often lecture notes are made available to students online, but they need to be enrolled in the course to get access. Some lecturers are happy to put notes online, but some are reluctant to do so because they may get ripped off by other academics, losing the copyright etc. – especially if their lectures are on research in progress.

      MIT puts all their lectures online, but they have such high status it adds to their kudos & market worth, and they can get away with it in ways lesser institutions can’t. But it’s all on the MIT site for anyone in the world who is interested and has web access.

      Hard for one government to buck the entire system at the moment.

    • ZB 10.3

      Its called broadband. The highway system of the new economy. We should not need to send our kids to a school miles away when they can get all the access they need at the corner wifi link and a teacher. We do not need to send young adults to higher institutions since all the available talent is wasting on the dole already right next door! If there was ever a call for capitalists its now. Its a shocker how centrally planned out economies are by neo-liberals who enact what they like and then claim they don’t regulate! These people are nothing better than National Socialists.

      The giant loophole in Student Loans will hurt NZ, as EU, Uk, US, have to inflate their way out of their debt! Its
      simply implausible for these countries to export their way out! They destroyed the liberal arts, movies, and culture
      that could pander to the emerging economies by making businesses degree bland ditto head executives.
      Its really going to be hard for a kiwi to return home if there is loan debt on the record, because its just going to cost them more and more, NZ is well positioned (if National can get broadband up and running in towns and cities
      across the country) – ps the whole crap about broadband to the farmers is a crock, it will be cheaper to get to the farmers once the price of the cables and the infrastructure is build in towns.

      I believe NZ could prosper, with CGT, with broadband, with a real business ethos that growing people into skills and business is the only way to grow the economy. But this is unlikely to happen, past experience shows the elites just get more arrogantly stupid until the crisis reaches a head, the problem with this crisis is it will be too late to stop massive dislocation from climate, resource, population… crisises. If we were really serious we’d shut down schools, universities and solve all the problems as we build the much more local societies we need in global networked world,
      and we’d have the patents from our solutions to rule the world for the next century. 😉

      Opportunity abounds, yet our inane elites are too desperate to restart the stupid finance economy to see it.

  11. comedy 11

    Hmm what else should be free – how about food, transport, accomodation and entertainment. Yes let’s make everything free and just get the gummint to borrow more money to pay for it – can I have another four LCD TVs as well

    • Pete 11.1

      Reductio ad absurdum does not an argument make.

      • Macro 11.1.1

        Sometimes it does, when all the propositions are of equal validity, but in Comedy’s case they are not, Some are basic human “rights” vis Accommodation and Food and so are in a different class to LCD TV’s; and transport is a variable that would have different “value” to different people.

    • Draco T Bastard 11.2

      Your lack of argument is basically stupid but your biggest mistake is believing that money pays for anything. Money is not a resource, money is an abstract tool, ergo, money doesn’t pay for anything. This, really, is the lesson that the world refuses to learn from the GFC and the collapse of the financial economy. Same as they failed to learn it in the 1930s or the 19th century or even from the collapse of the Roman Empire.

      • comedy 11.2.1

        Is this the piffle they teach you to spout at university these days or is just part of the troll bot programme ?

      • KJT 11.2.2

        Unfortunately, nobody has been able to come up with anything better than the market for deciding what gets produced and for whom. Command and control economies do not work either.
        I would agree, though, that using money as a commodity as if it had intrinsic value in itself, beyound that of representing hours of labour or raw materials, and financiers clipping the ticket on every transaction has failed us.
        That, however, is more to do with the fact we have abandoned control of our society to a political class which is heavily indebted to banks for their financing.

  12. KJT 12

    It should be subsidised, but there are many good reasons why it should not be free to students. I think we have already covered them.
    Students value their education and do not waste it.
    Cost. Just allowing everyone to go on to tertiary training just because they want to would break us.
    Universities are capable of absorbing every dollar they can get. Not to mention all the other courses providers will make up to get funding. It happens now because getting courses approved for subsidies is too easy and some courses are too cheap for students.
    It imposes a discipline on providers to actually listen to clients/pupils.
    There is an element of private good in tertiary education.

    The ones overseas who do not pay their loans are thieves and we should not reward them by rebating their loans.

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