Should the student allowance be enough to live on?

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Eavesdropping is one of my guilty pleasures. I like listening in to others’ conversations on the bus, in the office, wherever. (And most certainly on Twitter, where jumping into the stream is what it’s all about.)

Sometimes, though, these conversations only serve to rark you up.

Recent case in point: a discussion about the student allowance, and specifically how it’s not enough to live on.

Right now, student allowance runs to a maximum of $167 a week, from what I can tell. If you’re in Auckland, you can get another $40 in accommodation allowance for a total of $207. (If you don’t qualify for the student allowance, you can borrow $169 a week in living costs. This is never a good idea, because your loan balance will balloon like you cannot believe. But it’s an option.) And if you’re over 24 – a personal bugbear for me; why should you get more simply for being over an arbitrary age? – you qualify for up to $201 a week.

You can’t live on that alone, I grant you. But it’s not so hard to get a job for 10 or 15 hours a week, and with that additional income, it’s certainly more than enough to eke out a reasonable standard of living. Your income in any one week can be up to $203.13 before tax before your allowance payments are affected.

When I was studying, I received a total of $185 a week (the maximum back then). I was making maybe another $150 between my various hustles (I’ve always worked multiple jobs, although now my second gig consists of the very occasional mystery shop or essay editing gig).

My basic expenses were $100 rent (I was living three stages out on the bus route), $30 for transport (an unlimited monthly pass), $50 or so on groceries (a princely sum compared to the $25/30 I spent during the last year of high school in which I lived on my own) and utilities worked out to around $30 a week.

But I don’t want to live out in the burbs!!!

Well, you could live closer to town, or in town, and cut out transport for a corresponding gain in rent (probably $150 or more but you might find a cheap room for around $120). Still doable.

Yes, it’s an austere existence, but we don’t pay taxes so you can live it up while at uni.

And if you can’t find a job (or can’t work one because you’re a medical student, etc), then living at home it is. Such is life.

Worst case scenario, you left a small town in order to attend university and your parents can’t or won’t provide any financial help. That’s rough, and kind of leaves with little choice aside from racking up more debt. But as a student, you do at least have access to cheap loans and overdrafts (and potentially cheap credit cards; I can’t remember what the banks were offering in my day).

Let’s face it, nobody ever promised that student allowance would provide for all your needs. As a nation we simply cannot afford such a luxury. It’d be nice to have $15 minimum wage and free medical and dental care for all. But these things just aren’t realistic for this (any?) country.

What do you reckon? Classic entitlement attitude? Something worthy of tax dollars? Something in between?

18 thoughts on “Should the student allowance be enough to live on?

  • Reply tinysarah February 22, 2012 at 14:25

    Sorry E, can you clarify for me – do students have to pay this allowance back when they graduate? Or is it basically just “free” money?

    Our student loan system sounds similar – you’re granted so much per week, and it can be adjusted based on income earned. But that’s a loan. Much less sense of entitlement when you’re paying it back, ha!

    • Reply eemusings February 22, 2012 at 18:12

      Free money, if you qualify for it (based on family income, unless you are classified as independent, depending on your circumstances, in which case it isn’t taken into account). For those who don’t, then they’re eligible to receive similar payments that DO need to be paid back.

  • Reply Tracey February 22, 2012 at 14:42

    The allowance is “free money”. It’s only the loan you have to pay back.

    Personally I think certain qualifications, with heavy study time – such as medicine, should be eligible for an increased allowance. Perhaps with a condition that you need to work in the country for at least the first two years after graduating – like the teaching scholarships.

    However, aside from that, I don’t think the allowance should be increased. You don’t want to university study to be seen simply as a way to avoid work for a few more years, which does seem to happen now. Better the income limit be raised – the amount you’re allowed to earn before your allowance is affected. Why punish those who are willing to work hard for their future?

    • Reply eemusings February 22, 2012 at 22:43

      Love both your suggestions – great points. Couldn’t agree more. I understand there’s a concern about fairness, but those willing to work shouldn’t be penalised. As for the possibility of grades suffering, they now have some kind of requirement in that regard to student loans (and if you’re paying for it yourself – that’s your problem – and scholarship students will usually have their own grade standards).

  • Reply SWR February 22, 2012 at 18:24

    I am a graduate student in the US, in one of those programs where you’re really not supposed to work outside of your school commitment. I didn’t come into graduate school straight from undergrad, so the idea of living with the rents is both unappealing and impractical.

    However, as a US student, I have to pay back every single cent of the money that I spend on school and living expenses over the next few years. I would love it if I was able to get living expense money that didn’t have to be paid back. I think undergraduate students are definitely more likely to “party it up” while in school, whereas graduate students take their programs much more seriously.

    So I’m not really sure which side I come out on…but definitely something to think about!

  • Reply SP February 23, 2012 at 04:04

    As a US reader, it is hard to relate. We do have very limited grants for the poorest students, but the gov’t definitely doesn’t give you money that you don’t have to pay back to get through school. I think it sounds like it is enough to live very lean on, which seems like a fair deal.

  • Reply Sense February 23, 2012 at 11:33

    Yeah. The student loans are interest-free, as well, right? Coming from the US, I have no sympathy! 🙂 No increases. They need to be grateful for what they get, which is free money to study and loans that aren’t likely to get out of control because of interest. If it isn’t enough, most have the Bank of Mom and Dad and the high minimum wage ($13+/hour?) to fall back on, which US students have to rely entirely on (with $7.25/hour min wage). Students don’t know how CUSHY they have it here!

    I feel bad for Master’s and Honours students, though–they should qualify for an increase because of all the value they’ll bring to NZ. In the US MS students (in the sciences) usually get a small stipend and tuition waiver to get their degree…

  • Reply Revanche February 23, 2012 at 18:03

    I’d say not to penalize those who were willing to work to supplement their income as long as their grades stay up but other than that – if it’s free money? Shut it. It’s Free Money. Where on earth do students get off griping about free money they don’t have to pay back to someone who is under no obligation to pay it to when they aren’t making any promises to go on and become a taxpayer into that system?

    No strings attached money for you to get higher education and you’re complaining? Dear heavens.

  • Reply notmymother February 23, 2012 at 18:26

    Completely etitlement attitude all the way. As you said, that money comes from other people’s taxes, and I for one am not forking out for someone to have fun at uni. Get a job.

    The idea of extra allowance for courses like medicine is interesting, but I’d rather there was a reduction in the uni fees upon completion for those instead. Do you guys have HECS (or whatever we Aussies call it now) over there? At least that way there’s some incentive to finish the course.

    • Reply eemusings February 24, 2012 at 09:03

      Just Wikid HECs. Are you referring to the higher fees on certain courses? As long as I’ve known it, arts have always been the cheapest courses here while the likes of med are pricier degrees.

  • Reply fabulouslyfrugirl February 26, 2012 at 11:59

    In Canada, we can get both loans and bursaries (money that we do not have to pay back). I say that if it is free money, then one cannot complain about not getting enough free money to live a (more lavish) lifestyle. After all, as you mentioned, the more the incentive to work to supplement the free income.

  • Reply The Carnival of Financial Camaraderie #23 – Canadian Finance Blog March 3, 2012 at 23:00

    […] at Musings of an Abstract Aucklander presents Should the student allowance be enough to live on?, saying “Student life isn’t MEANT to be easy. […]

  • Reply Link love (Powered by spontaneity and scribblings) | Musings of an Abstract Aucklander March 4, 2012 at 17:48

    […] Carnival of Financial Camaraderie at Canadian Finance Blog! I’m in there arguing that student life ain’t meant to be easy. -36.867000 174.767000 Share this:StumbleUponPrintFacebookEmailDiggTwitterRedditLinkedInLike […]

  • Reply Miiockm March 5, 2012 at 14:11

    Wow, never heard of this allowance before. Why not just use the same money and make tuition cheaper?

    • Reply notmymother March 6, 2012 at 12:23

      The allowance is means tested, so not everyone gets it. Which is fair IMHO. (Speaking as someone who earned too much from her part time job to get Ausstudy when I was at uni)

  • Reply Living in NZ: The ultimate post | Musings of an Abstract Aucklander April 10, 2012 at 18:30

    […] a university education – government student loans are available to all and if you don’t qualify for a student allowance you can borrow a certain amount for living costs (which I wouldn’t […]

  • Reply Skippy July 31, 2016 at 01:57

    I’m trying to study right now. My (mandatory) paper load is 50 hours a week. I’m currently getting A’s but it’s at the limit of my capabilities. I’m also short about $50 a week (it should be noted that I rent one room and bike to uni, and don’t smoke or drink).

    The way the student allowance is structured I *have* to get a job for that. If there was a way I could borrow against the student loan I would, as that 5 hours a week is actually enough to affect my grades notably (I don’t even have *free* hobbies anymore). I’m more than willing to pay the money back.

    For the uninitiated there is a living cost allowance in student loans, but it is reduced dollar for dollar by the student allowance, which studylink themselves say is short in my area (underestimated too, I don’t have some of the expenses they list).

    What do the students with high paper loads & no time left do? The Bank of Mum & Dad has never been an option.

    • Reply Skippy August 2, 2016 at 01:34

      Sorry I was more than a little muddled and I wrote the last line in the 3rd paragraph incorrectly. I should have writen:

      (underestimated too, some of the expenses they list are too low. Eg cycling is apparently free, and you can get a flat for $100 that doesn’t have mould, etc)

      I may be able to meet that budget if I only ate porridge, rice & powdered soup mix, with maybe some canned spaghetti occasionally. And my bike never needed maintenance. And moved into a mould infested hole (when it was defrosted enough to grow, anyway). But two of those would compromise my health. Not keen.

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