Student loan changes create uncertain futures

Graduation ceremonies are being held at universities around the country but despite the celebrations 2012’s graduates face an uncertain future.

Among other changes, the Government announced that the repayment on student loans will be increased from 10% to 12% of everything earned over $19,000. But for many students struggling to find work the repayment increase means very little.

Isobel Kerr who graduated from Waikato University at last week’s Thursday afternoon ceremony with a degree in French, said that the loan changes did not affect her because she has not been able to find paid work despite applying for many entry level jobs. She is doing an internship with Oxfam to get experience.

Natalia Sutherland, a social sciences graduate, said she was not opposed to having to pay back her student loan but felt her ability to do so was limited by the current job market.

“Finding a job after university is not as easy as you are led to believe before and during your tertiary education,” she said.

“The whole point of gaining a degree in the first place is to be more marketable. But it feels like the more people are going to university as a standard practice, the more experienced  and higher qualified potential employers want you to be.

“So without a qualification you can’t get a job but without a job you can’t afford to get a qualification, resulting in student debt.

“The current lack of jobs  along with a number of qualified people competing for the same jobs equals no one being able to pay off their loans.”

Waikato University accounting lecturer Alison McCourt agreed the education level expected for many jobs has increased.

“Having a degree is no guarantee of a job,” she said.

“For my generation having even a generalised degree gave you some status but jobs that people needed no qualifications to do 30 years now require a degree as a minimum.

“Enrolments are up because people are all hoping to increase their marketability in a difficult job market but now even that is being made harder.”

Natalia Sutherland said: “It’s disheartening going through a three years of hard work to find yourself at the end of it applying for jobs you could have got without a degree.”

She was also concerned about the effect the higher repayments would have on low income earners.

“It sounds like a higher repayment threshold of paying back student loans would be helpful and quicker, but with the price of food and petrol, the extra money out of your pay packet on top of taxes, you feel like you need another loan just to live. New Zealand is increasingly feeling like it’s a much too expensive place to live.”

See related story.