Student loans don\u2019t stretch as far as they used to.<\/p>\n
There\u2019s been a sharp rise in living costs for students in the capital, and somehow, each student has to bridge the gap.<\/p>\n
\u201cDespite using the student loan or getting the student allowance, your total shortfall for weekly living costs plus all other expenses could add up to more than $10,000 a year,\u201d Victoria University of Wellington\u2019s 2023 Managing your Money report warns students.<\/p>\n
In 2020, the report\u2019s sample budget had weekly living costs of $432 plus annual extra costs (clothes, haircuts, trips home, flat bond and course-related costs) of $4900.<\/p>\n
READ MORE: The sample budget for 2023 has weekly costs of $488 plus annual extra costs of $5000, which works out to $96 a week.<\/p>\n There\u2019s a less-daunting price tag to studying in the South Island. The University of Canterbury estimated a flatting student could expect weekly costs of $348 plus annual extras of $3625.<\/p>\n In 2020, the costs estimated were $329.50 a week, plus $3265.<\/p>\n <\/p>\n The great student debt experiment began in 1992. Supporters say it has increased participation in education. Critics say it has loaded young people with debt at a time when house prices and the cost of living have gone through the roof.<\/p>\n<\/figcaption><\/div>\n <\/span><\/p>\n Sam Blackmore, a law student at the University of Canterbury, says students aren\u2019t a homogenous group, and their ages, wealth and ways of funding their tertiary studies vary widely.<\/p>\n Blackmore says many have such an income deficit that they are sacrificing basic needs to get by every day.<\/p>\n Student poverty comes at a price, as much is funded by student loans, which will load graduates with an extra 12% tax on their earnings over $21,268 a year, until they\u2019ve finished paying it off, Blackmore says.<\/p>\n The more they have to borrow to get by, the longer graduates would spend repaying loans, Blackmore says.<\/p>\n Some choose to live at their parents\u2019 home while studying, keeping down their costs, while some come from affluent-enough families their living costs get paid.<\/p>\n Living at home when studying gives students a massive financial advantage, even if they feel it’s a social drawback.<\/p>\n Instead of living costs of just over $25,000 a year, they could squeak by on just under $7000, according to Victoria University, though that requires their parents to keep footing their food bills.<\/p>\n These students\u2019 living strategies are reflected in the latest student loan scheme annual report, which showed just 59% of students who were eligible to borrow for living costs (up to $281.96 a week), actually borrowed the money. A similar proportion didn\u2019t take the $1000 loan on offer for course costs.<\/p>\n These numbers correspond closely to one of the findings in the People\u2019s Inquiry into Student Wellbeing, which was released in July by the Green Party, and which showed thousands of students were not adequately plugging that gap, and were living in poverty<\/a>.<\/p>\n The inquiry report, which covered the lives of just over 4500 students, found 40% had financial support from family.<\/p>\n Green MP Chloe Swarbrick says many people accept students living in poverty as \u201cjust part of student life\u201d.<\/p>\n But, she says: \u201cLiving in a state of poverty isn\u2019t an inevitability, it is a political decision.\u201d<\/p>\n ROBERT KITCHIN\/Stuff<\/cite><\/p>\n In July, Chl\u00f6e Swarbrick revealed to the media the findings of the People\u2019s Inquiry into Student Wellbeing. Sam Blackmore is seen in the background wearing a red mask.<\/p>\n<\/figcaption><\/figure>\n Most students also work while at university, but the $10,000 gap Victoria identified would require about 550 hours of work each year at a minimum wage, or around 10-and-a-half hours a week.<\/p>\n The data from the People\u2019s Inquiry shows that is what many do \u2013 68% of full-time students covered by the report worked. Of those, most did between six and 20 hours a week, it said.<\/p>\n But even with that, two-thirds of the people responding to the survey said they didn\u2019t have enough money to cover basic costs including food, rent and healthcare.<\/p>\n A small minority, roughly 3% to 5%, work full time, and squeeze study in round the edges.<\/p>\n Blackmore is working all hours as he enters his last year of study. When he\u2019s not working to earn, he\u2019s studying.<\/p>\n \u201cI\u2019ve quite enjoyed being able to study and work flexibly because everything\u2019s been online,\u201d he says.<\/p>\n ALDEN WILLIAMS\/Stuff<\/cite><\/p>\n Sam Blackmore, law student and lifeguard.<\/p>\n<\/figcaption><\/figure>\n At the end of the month, he steps down from the paid position of vice president of New Zealand Union of Students\u2019 Associations, but then he starts a new role with Surf Lifesaving.<\/p>\n \u201cThis year, for the most part of the year, I\u2019ve worked nearly 40 hours a week, while being in full-time study,\u201d he says.<\/p>\n It\u2019s been tough, and tiring, but Blackmore is 27, and feels pressure to work, so there are no gaps on his CV.<\/p>\n But his partner works as well, which has been hugely helpful, he says.<\/p>\n Desperation strategies to cover lean times when money ran short including simply \u201cgoing without\u201d until more money came in, such as not going to the doctor, or dentist, and skipping meals.<\/p>\n Others borrowed from family or friends, or took out loans from finance companies and banks, or put off paying bills.<\/p>\n The biggest contributors to living costs are rent, and food.<\/p>\n Victoria\u2019s sample budget of $488 a week included $230 of rent, and $100 of groceries.<\/p>\n Supplied<\/cite><\/p>\n Scarfies helped cement the idea that suffering in cold, damp rentals was a rite of passage for students.<\/p>\n<\/figcaption><\/figure>\n Students frequently tried to save by going for low-end, unhealthy rental properties, the People\u2019s Inquiry indicated.<\/p>\n One in seven of the students who responded to the People\u2019s Inquiry said their rental did not meet basic needs, such as warmth.<\/p>\n Auckland<\/a> and Wellington<\/a> were the most expensive places to rent, they said, indicating provincial universities offered the prospect of lower living costs.<\/p>\n Living in a hall can simplify students\u2019 lives, and reduce the risk of shenanigans in shared flats landing them with unexpected costs.<\/p>\n Victoria Uni points out that there are no transport costs as halls are generally within walking distance of its campus, and in many cases, electricity, internet, and food are included in the room rate.<\/p>\n It quotes $19,504 hall costs for the year, but says students should expect to shoulder additional costs of between $6925 and $9070 each the year.<\/p>\n Scholarships and grants can help meet costs, and some people qualify for a student allowance ($279.97 after tax for a single person not living with a parent), but for people aged under 24, that depends on their parents\u2019 incomes, which have to be less than $119,202.07 combined, if the student is not living with them.<\/p>\n Every dollar not borrowed to spend on living costs, means less student debt, and private bank debt (overdrafts and credit cards) that has to be repaid after graduation.<\/p>\n This is especially important for people intending on heading overseas after they graduate, as it\u2019s all-too easy to get into trouble on repayments, and see interest and penalty interest increase their student debt.<\/p>\n The latest student loan scheme annual report shows 106,612 borrowers were overdue repayments, and 73% were overseas-based.<\/p>\n Ross Giblin<\/cite><\/p>\n Living in a hall of residence can simplify students\u2019 lives, even if it does not reduce their costs.<\/p>\n<\/figcaption><\/figure>\n Victoria University of Wellington\u2019s 2023 Managing your Money contains \u201cwords of widsom\u201d from former students on their money-saving tips.<\/p>\n
* Student allowance to increase by $25pw, but students still ‘just scraping by’<\/a>
* How NZ university fees compare to the rest of the world – are they too high?<\/a>
* Savings, scholarships and salary: How three people paid off their student loans<\/a>
<\/strong><\/p>\n What choices do students have?<\/strong><\/h3>\n
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Words of wisdom<\/strong><\/h3>\n
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