Students set to get $50 boost

Tertiary students will 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.

Education Minister Chris Hipkins said that meant 130,000 students would be $50 better off a week.

Hipkins said no change was being made to eligibility rules for student allowances or loans.

‘‘We have heard the concerns of students and their families who have told us cost is a real barrier to taking on tertiary study,’’ he said.

Student allowance rates and loan living costs maximums would be further adjusted for inflation on April 1.

The Accommodation Benefit was scheduled to rise by $20 a week in 2018, to a maximum of $60 a week.

Hipkins said the Government was also on track to deliver the first year of fees-free education and training from the start of next year. This was the first step towards three years of fees-free tertiary education for New Zealanders by 2024.

National tertiary education spokesman Paul Goldsmith said Labour’s big education plans could have ‘‘unintended consequences’’, including lowering the qualification completion rate and putting pressure on some institutions.

He said the Government’s fees-free policy should have been targeted at those with the greatest financial difficulties, rather than a blanket policy.

The haste meant there wasn’t enough time to gather all the evidence, he said, adding that it was still unclear how many people were avoiding higher education because of the cost.

Goldsmith also raised the issue of whether Australians qualified for the free fees, given under the trans-Tasman relationship Australians have access to domestic rates, not international ones like other countries.

Hipkins said Australians would continue to be able to pay domestic fees but wouldn’t qualify for the free component.

As for the allowance boost, Goldsmith said there were many struggling New Zealanders who would have welcomed a 28 per cent rise in their weekly income.

Labour’s pre-election costings put the cost of the policy at $340 million per year, along with $270m per year for the boosts to student support.

It plans to release the up-to-date costing of the plan next week.

New Zealand Union of Students’ Associations national president Jonathan Gee said this was ‘‘big news for students’’.

‘‘The boost will be the first substantial increase to student support in over a decade,’’ he said.