Struggle Street: Unpacking StudyLink’s Biggest Flaws
Words by Maia Ingoe (she/her), Beth Mountford (she/her), Lily Holloway (they/them)
StudyLink plays a massive role in helping students finance their way through university, but the system is deeply flawed. Here are four key questions Salient investigated to shed light on the various shortcomings of StudyLink.
Why Is Applying for a Student Allowance So Complicated?
Student Allowance is the heavenly, loan-free payment that a lucky few students get access to. StudyLink measures parental and personal income and factors in marital status and siblings to determine who gets the support payment and how much.
Students qualify for allowance if their parents’ combined income from the last year is under $100,000. StudyLink reduces this figure if you don’t live with your parents, if your parents don’t live together, or if they support another student between 16–23. There are further reductions if you only have a relationship with one parent, or if you have no relationship with parents, but at both stages proof is required. All of these factors combine as ‘means testing’ for the allowance, determining who gets it and how much they get per week.
According to the Ministry of Social Development, the parental income threshold targets allowance payments to those who need them most. However, this method assumes that parents with higher incomes inherently support their children while at university. In reality, every parents’ willingness and ability to provide financial support is different, but StudyLink does not consider these nuances.
Lillias Ovenden-Carlyle moved to Wellington at the start of 2021 with her student allowance application still pending. When it wasn’t accepted, she had to jump through hurdles to show her parents income had changed from the previous year: “[Since last year], my parents have worked less hours, my Mum’s had a baby, there's been a pandemic, those are not true numbers.”
While Lillias wasn’t eligible for student allowance at first, it didn’t mean her parents had the ability to support her. “I thought that it was quite frustrating that they only consider siblings of over 16 that are also in school,” she said. “With my parents being split up and having children that are much younger than me, who all require uniforms [and] food […] it’s a bit hard to full time support me and support them.”
Some students are able to access the payment despite their parents having a high income or wealth. Students may be getting the allowance payment because their parents have wealth tied up in a trust or business assets, or lowered their income for the previous year. When asked about how fairness is ensured in this sense, the Ministry of Education (MoE) noted that parental income is defined as any income earned during the study year, including any income “parents may have directly or indirectly deprived themselves of.”
“I totally respect people who are able to [work the system],” Lilias said. “[I]f your parents are able to pay you, like, $500 a week, you know, it's [a] completely different situation […] Mum sends me $10 for cheese every week—that’s my trust.”
Why Does My Student Allowance Limit My Personal Income?
Even after students access the allowance, a threshold limits the personal income a student can earn to supplement their allowance payments: up to $227.18 weekly, before tax. Earn anything above that, and the allowance is reduced. Similar thresholds and limits on personal earning exist for most of Aotearoa’s social benefits. $227.18 equates to just over eleven hours on the current minimum wage, but after tax and student loan repayments, that income looks a lot smaller.
The MoE told Salient, “The threshold is designed so that students can undertake some work, but not to the extent that work impacts negatively on their study.” There are no current plans to review these limits.
Teresa Davenport, co-convenor of Greens at Vic, limits her work to between nine and twelve hours a week and it still affects her allowance payments. “I have had to make significant cuts to my lifestyle and hobbies”, she says. “Especially to my food, I can’t afford anything ‘fancy’, I rarely eat out […] takeaways are more expensive than chilli beans on toast, which is a typical dinner for me.”
With the median weekly rent for a four-bedroom house in Wellington now at $1000, the full allowance payment struggles to capture the realities of living for most students, especially with these limits on personal earning. Teresa wants StudyLink to allow students to earn more money without losing out on allowance: “I’m not asking the government for more money, just to earn more money because the cost of living is out of control.”
If you don’t live with parents, you can get up to $240.65 in allowance, after tax; however as of 1 April, both student allowance and loan payments increase by $25. The MoE stated that the costs of tertiary education should be “shared”, with students and their families expected to contribute though vacation earnings or part-time work.
There’s also the accommodation benefit: an extra payment that is supposed to make up for variations in market rent across the country. In Wellington, students can receive a further $60, but this benefit is only for those who qualify for a student allowance. What's stranger is that this accommodation benefit in Wellington is the same as it is in cities like Gisborne, Matamata, and Blenheim, despite the market rent here being a lot higher.
New Zealand’s Union of Student Associations (NZUSA) is campaigning for a universal education income: a payment available to all tertiary students, both undergraduate and postgraduate, that is not means-tested or time-limited like the current student allowance is. In addition to making the payment universal, NZUSA advocates for an additional $100 to student allowance costs to cover basic costs of living.
Why Does StudyLink Not Care About Postgraduate Students?
Postgraduate students above honours level are not eligible for student allowance, even after they pass the age threshold of 24 and are considered financially independent from their parents/caregivers (according to the MoE). If you heard it here first, I’m sorry.
They say that this policy “reflects the Government’s expectation that parents who can afford to, will provide financial assistance to their children in tertiary study into their mid-20s.”
At this threshold, if you have moved on to—or returned to—postgraduate-level study above honours level, you still do not qualify for StudyLink student allowance. The MoE’s rationale for this is that postgraduate students are expected to earn more once they enter the workforce.
They continue, “As a result of these higher earnings, the median expected student loan repayment times are shorter for postgraduate borrowers than for other borrowers.” With postgraduate-level loans being repaid one and a half years faster than those of bachelor’s degrees.
While this reasoning checks out in the long-term, it seems like a nonchalant way of dismissing the struggles that postgraduate students go to to make ends meet while they are completing their study.
After four years of racking up the maximum loan living costs, and still having to work part-time just to pay rent, my own student loan sits at around $77,000. Entering into my master’s, I couldn’t bring myself to add to this terrifying number by taking out more loan living costs. In order to keep my loan from cracking $80,000 I’ve had to drop down to part-time study and work two jobs just to sustain my life here.
Other comments from the MoE also indicate that they consider education an asset that will pay off in the future. They say, “The size of a student’s leaving debt is not necessarily an issue if they receive a good return on their education investment.”
Renee Wang, a master’s student at the Victoria University of Wellington, says that no longer qualifying for student allowance has meant having to rely on her parents, as well as working part-time to fund her study.
“I’m lucky enough that that’s an option”, she says. “[I]f someone was in a different situation then they’d have to take a lot longer to [complete their qualification] [...] given than people are already dropping out of Vic Uni because they can’t afford living in Wellington, what do they expect postgrads to do without StudyLink?”
Why Do Students Study Over Summer for StudyLink Payments?
I have enrolled in two courses every Summer break of my tertiary study; three of these courses ended up being superfluous to my graduation requirements. Don’t get me wrong, I love learning for learning’s sake, but for me, enrolling in these courses was not simply due to a curiosity for philosophy or Latin, it was also about ensuring financial stability over the break. I am not the only one who has studied extra courses in order to qualify for the student loan: For many it is simpler to study over the break than it is to find longer work hours or apply for the Job Seeker Support Student Hardship (JSSSH).
The JSSSH is a weekly payment for student job-seekers who are on a break of more than three weeks and who intend to continue to full-time study within sixteen weeks. There are several factors that make it harder to qualify:
If you are a single student, you must have less than $4300 in assets. If you have a partner or child, your combined assets must be less than $7464.
You must also “be actively looking for full-time work” and be willing to enter into any “suitable employment”.
As with many services offered by StudyLink, depending on your circumstance you may have to prove your family’s lack of financial support and/or your illness (if you are unable to work) in order to qualify for the JSSSH. This can involve costly doctors’ appointments or that sense of indignity that comes from having to constantly prove your lived experiences (one application question asks you to “please explain how your parents’ financial circumstances affect their ability to support you”). Many students feel that it is much easier to qualify if you already receive the student allowance (another application question asks, “Why don’t you qualify for a Student Allowance?”). Your benefit is also reduced once you earn over $160.
The issue with the JSSSH and the struggle to fund yourself over the Summer break really comes down to those same three issues found across many areas of StudyLink: the assumption of support that isn’t there, the stressful and time-consuming process with no guarantee of success, and the fact that the amount offered is barely enough to live on, regardless.
When asked about the phenomenon of students undertaking more study over the break to qualify for the student loan, the MoE told Salient, “Students make their own decisions about what and how to study, and how to fund this.”
If you think the JSSSH might be right for you, make sure to get your applications in four weeks before your break in order to get your payments on time.