Business NZ urges review of student loan system

With universities set to keep thousands of would-be students from study this year, Business New Zealand has called for more targeted enrolments, as well as removing interest-free loans and fee limits.

The Labour and Green parties have slammed the universities' move as a direct result of National's capping of student numbers in disregard to the so-called knowledge economy. The Tertiary Education Union says it will keep ordinary New Zealanders out of study.

Tertiary Education Minister Steven Joyce insisted that universities were getting more funding than ever before. This year Victoria University got $7 million more than last year, he said. "Is it enough? There's a limit to what the taxpayer can do but it's a bucketload."

With the exception of Canterbury University, New Zealand's six other universities have confirmed they are, or are likely to, turn away more students than previously. Lincoln University says it will be closely monitoring enrolments.

Business NZ chief executive Phil O'Reilly said the capped enrolments would only be a problem if students were kept from subjects – such as engineering, technology, and science – that fed directly into skill shortages in the workplace. Reducing enrolments on subjects such as sports sciences would not be a problem.

He called on the Government to consider ditching interest-free loans or increasing the maximum fees universities were allowed to charge students. Doing so would mean universities could afford more students. However, lifting maximum fees without changing the loan system would further burden the taxpayer.

"What the government has to do is review all of it," he said.

Tertiary Education Union president Tom Ryan said the move to restrict entry was because the Government had failed to foresee more students would be going to university because of demographic changes and the recession.