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Salient. Newspaper of the Victoria University Students' Association. Vol 42 No. 15. July 9 1979
The Major Issues
The Major Issues
The Basic Level
The basic level of the new Tertiary Study Grant is $23, not $40 as implied by the Prime Minister in the budget. This represents a significant change from the STB. Instead of four different levels there is now only one.
| Years | Abated | Unabated |
|---|---|---|
| 1 — 3 | $19.00 | $30.00 |
| 4+ | $22.50 | $33.50 |
Obviously the group of students that suffer the most are those on the unabated rate. They represented, in 1978. about 57% of all STB holders and will suffer weekly reductions of either $7 or $10.50.
The following figures show the distribution of students on the abated and unabated rates throughout the seven universities.
| Auckland University | 3704(62.4%) | 2230(37.6%) |
| Waikato University | 426(33.2%) | 859(66.8%) |
| Massey University | 363(13.1%) | 2401(86.9%) |
| Victoria University | 2143(65.1%) | 1150(34.9%) |
| University of Canterbury | 1904(49.3%) | 1964(50.7%) |
| Lincoln College | 142(13.8%) | 888(86.2%) |
| Otago University | 994(22.2%) | 3492(77.8%) |
At a minimum at least one-third of STB holders will suffer a direct cut at each campus. The effects are most severe at Massey, Lincoln, Otago and Waikato.
The position of unabated students shows how farcical the Minister's claim that the controversial abatement has been ceased is. Rather than abolish the abatement (which has been a demand of students since its implementation in 1976) Mr Wellington has abated all bursary holders.
Superficially one would expect that the abated students would have reason to be content. There is little effective change for those on $22.50, but on the surface that one $19 get a $4 increase.
But this $4 deserves a closer look. Three other factors need to be considered. The fees increase will mean at least an extra $1 a week. The tax changes announced in late 1978 will take full effect next year and according to the Department of Education this will mean an extra $1.50. Finally if a conservative estimate of a 10% annual inflation rate is assumed, then another $2 needs to be added. Thus in order to retain its 1979 value the abated rate should be increased to $23.50. Where is the real increase for this group of students?
The above formulation is a very conservative one and actually misleadingly portrays the real losses of all students. In February a Department of Education confidential document was leaked to Wellington's Evening Post. That document revealed that in order to restore the STB to its real value in 1976 for 1980 it would have to be increased by $9 per week. This $9 was made up of $7.50 for erosion by inflation and $1.50 for tax changes.
Thus the following table illustrates the loss in real terms for STB holders through the Tertiary Study Grant.
| Year | Abated | |
|---|---|---|
| Required Level | Actual Loss | |
| 1 — 3 | $28.00 | $5.00 |
| 4+ | $31.50 | $8.50 |
| Unabated | ||
| Required Level | Actual Loss | |
| $39.00 | $16.00 | |
| $42.50 | $19.50 | |
Returning to the new single level, it is also misleading to state that $23 is the basic level. In fact there is an income restriction on this. Students are not eligible for the $23 if they are in receipt of a personal income of over $3,000 per annum. The amount of the grant will be reduced by $2 weekly for every $100 or part thereof over $2,000. For full-time students, holiday earnings may be disregarded.
The Hardship Provision
In addition to the Tertiary Study Grant of $23 there will be a Supplementary Hardship Grant of up to $17. This will be available only to those in receipt of the Tertiary Study Grant and who would be unable to study full-time without additional financial support.
Based on past experience, one can have absolutely no confidence in the ability of the hardship provisions to work fairly and adequately for students.
| 1. | Under the present system of hardship only about 3.3% of STB holders (bursars) were successful in gaining an ordinary hardship allowance in 1978. |
| 2. | Despite this, 55% of bursars in 1978 had to take out part-time work during the course of the academic year. In a period of a contracting job market, how many students needed to get part-time jobs but could not find any? |
| 3. | Furthermore one third of bursars had to take out loans. |
| 4. | The current hardship criteria is confidential. Some form or variant of means-testing appears to be involved. It is almost certain that the new criteria will also be confidential. |
| 5. | The confidentiality of criteria will inhibit the effectiveness of any appeals procedure. Students will not know the basis for the hardship claims' rejection and therefore will not know on what basis they can appeal. |
| 6. | The new system will mean a greater number of hardship applications. Universities are already overextended with the present applications. This will further contribute to an adversary relationship between the Registries (through the Liaison Officers) and students. |
| 7. | In the current STB there is a "frozen" difference of $11 between the abated and unabated rates. Therefore when there was an increase it was applied equally to all four levels. However there is no guarantee that in this new two tier system this will be the case. There is every reason to believe that when future increases are made they are likely to be for the $17 rather than the $23. A comparable example is in Sweden where a two-tier grant/loan scheme operates. When the Swedish sche,e was first introduced in 1964, the basic grant represented about 25% of the total assistance package. By 1968 it was 22% and in late 1975 it was only 15%. |
Entitlement and Loans
One of the most severe changes has been made to a student's entitlement to bursary assistance. At the moment a student is entitled to the STB for two undergraduate degrees and one graduate degree. In 1980 a student will be only entitled for assistance for a maximum of five years or for two recognised courses, whichever is the lesser.
This affects many students who ordinarily would be entitled to assistance. Students doing longer undergraduate degrees, such as law and medicine will be limited in their ability to complete their courses, let alone do post-graduate work. Many students take four years to complete their Bachelor's degree. Their ability to do post-graduate work or a second undergraduate degree will be impaired. It is also a disincentive for students who would like to do a two year mask-rate involving research for a thesis.
Even "academically successful" students will be hit. They could be eligible for only four years' assistance. For example, if a student completed his/her Bachelor degree in three years and Honour in one, s/he would not be entitled to bursary assistance for a fifth year to do a masterate or diploma course.
It is evident that the Government is endeavouring to establish a parallel system of grants and loans. Restricting the grant entitlement is the means of acheiving this. A system of supplementary assistance in the form of loans is being investigated for introduction as soon as practicable. It will include provisions for "support" for students not eligible for tertiary study and/or fees grant assistance. And yet the [unclear: Steer] Committee of the Review of Financial Assistance for Post-Compulsory Study has recommended that any loan system should not be at the expense of the [unclear: grar] entitlement.
Fees
Currently University Entrance entitles students to Fees Bursary which pays for all tuition fees. This applies to both full-time and part-time students. [unclear: And] the new scheme the Fees Bursary will be replaced by a Tertiary Fees Grant which will meet 75% of tuition fees. In 1979 this would have amounted to students paying approximately $50 in fees. With the erosion of university funding, however, it is quite possible [unclear: tha] fees may increase in future.
There is also an income restriction on eligibility for the Tertiary Fees Grant. Students are not eligible if they have a "personal gross annual income from any source" in excess of $3,000. It is unclear whether the words "from any source" apply to supposed assistance from parents or spouse.
This fees hike signifies an erosion of the principle of free tertiary education. Furthermore it is now much more difficult to retain (or easier to lose) the fees bursary. This more students will be paying fees and fewer will be receiving a fees bursary or grant.
Means-Testing
Even though the National Party rejects means-testing for its pet Superannuation Scheme, it is nevertheless prevalent through this new bursary scheme. Essentially there are two types of means-testing; parental (including spouse) and income ( of the individual). A mix of the two is also possible.
Parental means testing will be applied for single students under the age of twenty. In applying for the Supplementary Hardship Grant, this group of students will have to make joint application with their parents or guardian. About 53% of all students are under 20. One of the greatest faults of parental means-testing is that it assumes a uniform willingness of parents to contribute towards the costs of university education.
As stated earlier, both the Tertiary Study Grant and the Tertiary Fees Grant are income-tested. The problem with income testing is working out a fair and equitable system in which to do it. One way is to base it on the previous year's income. But this falls down because both personal and general [unclear: circumstances] can vary considerably from year to year.
Another way is to base it on assumed earnings for the coming year. However, assumed earnings are not easy to assess in advance and the result can invariably be significant discrepancy between assumed and actual earnings.
Means-testing effectively is a device for cutting expenditure. It works two ways. First it deters people from applying for assistance especially when parental testing is involved. It is an humiliating process which involves an invasion of privacy. This is an important factor as to why so few students acutally apply for the Hardship and Special Hardship Allowances.
Secondly because it is a secretive method, it can mean cuts in a very real and direct sense.