Education costings released

Labour’s $50 a week rise to student allowances and student loan living costs is expected to cost about $200 million a year.

On Tuesday, Labour confirmed tertiary students would be $50 better off a week from the start of next year.

From January 1, 2018, student allowance base rates and the maximum amount students can borrow for living costs will rise by a net

$50 a week.

Where the allowance rate reflected the living costs of two adults, the increase would be $100 net a week.

Before the election, Labour said the policy would cost about $270m a year.

However, when it released the details of the policy on Tuesday, the cost was missing.

Yesterday, Labour released its preliminary costings for the policy, which was about $200m a year, lower than the figures in the preelection fiscal update.

For the 2018 financial year, the policy was costed at $94m (as it would only be in place for six months).

The following three years, the cost of giving students that extra cash each week rose to $200m in

2019, $202m in 2020, $205m in 2021, and $210m in 2022.

The split between the cost of the rise to student allowances, and those to student loan living costs was relatively even.

A spokesman for Education Minister Chris Hipkins said the rises in the cost of the policy yearon-year was based on student population forecasts.

Further details of the fees-free plan, including official costings for both fees free and the student allowance and living cost changes were expected to be released next week.