Whether you are considering going to university, or your child is about to embark into the world of tertiary education, this three part series will help inform everyone on the finical side of university. Part one will discuss what sort of help the New Zealand government can offer. Part two will offer advice on how to prepare finically for university, and part three will discuss how to manage your finances while at university. The main aim of this series is to help reduce getting into such debt in the first place.
Student loans, student allowance, living costs and course costs, are the four forms of financial help available to students in New Zealand. Three years ago, I was the first child in my family to go through the dreaded process of having to apply for all these things. In this article, I hope to shed some light on the topic of student finances to help make the whole process a little easier.
First of all, whats the difference between the four?
Student loan = This is money you never get in your hand, once it is applied for, and accepted, it is paid straight to your university to cover your course fees. You can receive this no matter what your paternal income is, as long as you meet the New Zealand residency requirements. This has to be paid back. Currently, it is interest free unless you leave New Zealand. A standard arts and commerce degree per year is $7000-10,000 and science degrees are $10,000 and up a year, depending on your course, with degrees such as medicine and dentistry costing significantly more. The tax department will deduct money off your wages when you are earning more than roughly $20,000 a year. You can also make voluntary repayments as well to supplement those from wages.
Course related costs = each year, you are allowed to borrow up to $1000 for course costs, such as for text books, special clothing, equipment or computers. This is added to your student loan. You can be asked for proof of where this money was actually spent at anytime, so it pays to only take as much of this $1000 as you need, and keep all of the receipts. You can access this money at anytime during the study year, and multiple times. So you could take out $400 for semester one, and $500 for semester two.
Student allowance = This is the only help for students in New Zealand, that is NOT required to be paid back. It is a form of benefit. It is based on your parents income, and if they earn under a certain amount, then you are able to qualify for up to $200 a week. The amount varies on the amount your parents earn, whether you live a way from home, and how much you, the student earns. The student can earn up to 200 a week before the allowance gets affected.
Living costs = If your parents earn more than the threshold for student allowance, or if you don't get much from student allowance, then you can get living costs. This also goes on you loan, and you can borrow up to $180 a week. What ever you earn from student allowance is deducted form this. So if you got $100 from your allowance, you could borrow $80 from living costs.
Now that that has been explained, lets crunch some numbers.
Imagine if you were unable to qualify for student allowance, because your parents earn too much, so you rely on the government for all of your university
A average year at university tuition fees is about $9000
plus course costs $1000
plus living costs for 40 weeks of the year =7,200
The average degree is 3 years, so if you needed to rely on the government for all your student finances , you would be in $51,600 worth of debt. That is a lot of debt for a young person to carry on their shoulders when they are just making their way into the world. Even if you do qualify for student allowance, you could still end up with $30,000 debt, which is not a small figure either.
But never fear! In part two of this series, I will be offering you some advice on how to prepare for the finical cost of university
To access more information or to apply for any of the above, head to the study link website. Make sure you apply for these well in advance, like in the November before the year you start studying. They take a long to process, and require quite a bit of information, including copies of birth certificates, and proof of paternal income. They can be quite particular about what counts as evidence.