Today, Steven Joyce as Tertiary Education Minister announced changes to the student loan and allowances scheme. When I say announced, I mean that he held a media conference at which he told the assembled reporters about the changes. He did not produce any paper, apparently could not offer much in the way of figures to back up his announcement and gave some vague answers. He has finally late this evening released his notes which shed only a little light on proceedings.

This is irresponsible and cynical. Pre-budget announcements are nothing new, I know that, but if you are going to do do them, how about actually giving details about what you are going to do? Student support is one of those areas where the details matter to individual students and their families. Many students live financially fragile lives, and little changes mean a lot. For families trying to support their children and plan their future, announcements like this have significance. Judging by the questions I am getting on email and on Twitter people are confused, and it is no wonder.

The reason it is cynical is that this is about getting the bad news away before the Budget so that on the day Mr Joyce can show how he is putting some more money into research and certain courses. The robbing Peter part of the equation out of the way, it will be time to pay Paul on Budget Day.

As to the substance of the announcement, they are giving all graduates with loans a pay cut by increasing the repayment rate and they are cutting access to allowances, including limiting eligibility to four years. This is significant. This means no allowances for people in later years of studying medicine, engineering, architecture, veterinary science or for post graduate study or double degrees. In short the very things the government says it wants.

There are still loads of questions unanswered about the detail of the announcement (such as what happens to those in the middle of longer degrees, do four years of allowances at any time in the past make you ineligible from next year?) but the overall message is clear; this government simply sees tertiary education more as a cost to be cut than an investment in our collective future.

 
 
Interesting article today quoting Sir Peter Gluckman on a possible new element to the brain drain; students undertaking their undergraduate studies overseas.

In the absence of any real data on this its hard to say if there has been a spike in students going overseas to undertake undergraduate studies. Anecdotally there has been an increased presence of Australian universities holding recruitment sessions at some schools. Just how many students are taking them up is a piece of information worth knowing, and I welcome Sir Peter looking into it.

One thing is for sure and that is that Australian universities are now operating in an environment where targeting New Zealand students makes sense. They have had a number of funding increases in recent budgets and are operating in an uncapped environment when it comes to enrolments. Add to that the ease with which New Zealand students can enrol and be treated as domestic students in terms of fees, and the incentives are there on both sides.

All of which makes Steven Joyce’s comments in this story just bizzare. He says

Joyce said the election promise had not been about stopping the brain drain, but increasing the success of the New Zealand economy so more people felt they could be successful here.

”It doesn’t apply to undergraduates, it applies to people earning high incomes in New Zealand,” he said.

First off it is simply untrue to say National did not campaign on stopping the brain drain. Take a look at the billboards Mr Joyce, that is exactly what they promised. And the opposite has occured.

Moreover his laissez faire attitude to the departure of undergraduate students is bizarre. They are the future earners of high incomes! We have a hard enough time keeping our best and brightest here without waving them goodbye at 18.

Regardless of the accuracy of the claim of undergraduate flight, we do need to take another look at how we invest in the tertiary sector to ensure that we are getting the best outcomes for students and for New Zealand as a whole. There does need to be a focus on both ensuring equity of access and developing world class institutions. More from me on that soon. But in short we also need to see the sector as a key part of our economic growth agenda, not some drain on the country;s finances.

When I listen to Steven Joyce I sometimes feel that the whole tertiary education thing is a bit of nuisance to him, (eg his moves to “dampen demand” and the budgeted decline in tertiary funding) rather than the opportunity for economic and social progress that it should be.

 
 
Earlier in the year the Prime Minister said the government was going to rein in the student loan scheme “big time”. He refused to say what this specifically meant, but it is clear the government has plans. Having decided that they can’t do what they really want to do in terms of getting rid of the interest free part of the scheme they have made a number of changes to limit eligibility, such as stopping those 55 and over borrowing for the living costs portion of the loan.

But there is more to come. In answer to a written question I put in about reports that the Minister of Tertiary Education had received about changes to student support, came this answer from Steven Joyce.

I have received many reports and briefings regarding future student support arrangements since 1 August 2011, if the Member would care to be more specific I will endeavor to provide a response. However, the Member should note that many of these will relate to future Budget decisions and therefore will not be released prior to Budget day.

So students can expect changes to be announced on Budget Day. Rumours abound as to what the changes will be. I have heard talk of major changes around allowances that would effectively wipe them out in favour of loans. This would be hugely controversial and create major equity issues. Moreover it would have the effect of massively increasing the student loan balance which would seem to be the opposite of the government’s policy objective.

More likely is an implementation of National’s election manifesto statement about student loans that

Ensure students who borrow from the scheme are working towards qualifications that can attract an income that allows them to pay back the loan.

This relates to the already announced plans to publish the salaries of people with particular qualifications. It raises huge concerns. What courses will not be eligible for student loans? What time scale will be used to identify the income? Will other factors will be taken into account to assess the value of a course?

I am all for ensuring that tertiary education plays a major part in providing the skilled workforce that we need. I also think we need to keep a careful eye on the quality of courses, but that is not the same as saying students can only borrow for courses that attract a particular income. The salaries earned by graduates are not the be all and end all of the value of tertiary education. Bob Jones famously once said he would rather employ an arts graduate than a commerce graduate because they had been taught to think.

We need to have a wider view of the value of tertiary educaiton, firstly for the individuals concerned and what they learn, but also for society as a whole of having people who have undertaken a range of courses. We want musicians, designers, artists or whatever it might be that the Minister considers is not earning enough, don’t we? They might not have huge financial benefit, but they are important in a civilised society.

Budget Day could be very interesting, and possibly disturbing for students and future students.