http://rankinfile.co.nz/rf99StudentLoan_letters.html

letters to editor, NZ Herald, 23 Nov 1999

A significant flaw in the "one cap fits all" student loans scheme is that gender is invisible. Student fees for each course are gender neutral. Wages and salaries, however, are not.

Recent employment data, collected six months after graduating, show that female graduates with degrees and in fulltime employment earn less than men in all fields of study. Men are paid on average $3,250 more than women.

Do employers offer women the same job for less pay? Alas, the Privacy Act makes it impossible for many women to compare their pay packets with those of men in similar work.

"Equal pay for equal work" has become an empty slogan. The average man can pay off his loan much faster - and once the average woman has a child-raising career break, the disparity widens. Estimates indicate that a $20,000 debt will take a male 17 years to repay; a woman 51 years.

Keith Rankin attempts to portray the loan repayment schedule as a "simple tax surcharge" and notes that school-leavers and mature-age students can go on to become high earners. Young male and female graduates, however, are headed for very different economic futures.

Also invisible are the many older female students who borrow money to get the qualification needed to support themselves and their student children fully after a marriage break down. Their old part-time job simply doesn't pay the bills in a one-earner household.

Starting at the bottom rung of a career at age 45 encumbered by a "simple tax surcharge" for life is no joke. No amount of tweaking, such as an interest freeze when studying or not employed, can make the student loans scheme fair and equitable for women, which is a good enough reason to justify consigning it to the scrap heap of failed "new right" economic experiments.
 

Lynne Dempsey misunderstands my Dialogue piece on the student loan scheme (3 Nov). I strongly condemned the loan repayment regime as being too great a burden on young ex-tertiary-students, many of whom are women. I highlighted the way in which student loan repayments exacerbate the unusually high burdens that the general income tax scale places on lower income recipients.

It is important, however, that any replacement of the student loan scheme does not eliminate the benefits of the present scheme. As it stands, universal loan benefits are available to older students who used up their five-year entitlement to a student allowance when they were young.

Increasing numbers of people now attend university at the end as well as at the beginning of their careers in the paid workforce. Short of a universal basic income (discussed in Simon Collins' column on 1/4/98), only a scheme like the present loans scheme can provide ongoing study support for prematurely retired people. While many older students will contribute to a public knowledge economy through committing their time to postgraduate research, most will never repay a cent of their loans.

Our older population should have full access to the resources of the public tertiary education system. That's crucial to the creation of a knowledge society. The marginal cost of a humanities degree is not high. Helping 50-year-olds to fulfil their creative and intellectual potential is better value for public money than paying them to get coronaries while constrained by the terms of their 50-plus benefits.
 

Funding for tertiary education is mainly from the taxpayer through the Consolidated Fund. Therefore the taxpayer is entitled to have some say as to how these funds are used.

As a novel suggestion, why not make the initial degree or qualification free, provided it is completed within three years - no failures accepted - with each year to be treated as a separate entity and evaluated; or, to make up for any failure, the student to pay fees to catch up.

Postgraduate study could be a charge on the student and would certainly reduce the number seeking double degrees at the expense of the taxpayer, thus minimising the dread disease of multiple diplomatosis.