Wellington, May 31, 2017
A short-term measure to take pressure off desperate students would be to simply increase their weekly borrowing limit.
Last night, I spoke to Victoria University students, and student welfare was a major focus.
Beyond the long-term solution of reforming our land use and building terms, we need a short-term measure for students who are desperate now.
The borrowing limit for student living costs needs to catch up with the reality of the market students face. Since 2006, rents have increased by about 45%.
In other words, a $140 room now costs over $200.
The weekly borrowing cap for living costs, however, has only increased by 19%, from $150 to $178.81, meaning many students can’t even use it to cover rent.
We should have increased the borrowing cap in line with rental costs. If we had done this since 2006, the cap would be about $40 higher than the current level.
A stronger ACT will force National to make this belated adjustment, and we would then index the borrowing cap to ongoing rental inflation.
This would be a huge relief for students’ suffering from rent-induced hardship. And because it has to be paid back, it is not a huge burden on the taxpayer, and students still have an incentive to borrow wisely.
See also: Aotearoa Students’ Alliance: ACT Giving National a Lesson
David Seymour is Elected Member of Parliament from Epsom Constituency and Leader of ACT Party.