Last week the Ministry of Education released a paper on student allowances in 2009, showing increases of 26% in recipients and 30% in payments over 2008. That resulted in an interview of Steven Joyce, Tertiary Education Minister, on Radio NZ – he was a bit surprised by the extent of increase in expenditure. NZUSA got in on the act too, saying that it was a welcome sign of student support, but there was a need for more support.

Allowances have continued to boom in 2010, though. StudyLink reports quarterly student loans and allowances statistics on their website. Their Jan-Mar quarterly figures show a 28% increase in student allowance recipients in 2010, when compared to the same period in 2009, and a 36% increase in payments.

That increase is quite surprising, as providers were already at or near their funding caps last year and those funding caps have not expanded markedly in 2010. I can think of a few reasons for the increase, but I’d appreciate feedback.

• The most likely reason seems to be frontloading of enrolments. The high enrolments last year will result in pipeline growth and new people would have flocked in for the first semester. With places like Victoria University closing off 2010 enrolments after an early surge, this is a good explanation, but I struggle to see how it could lead to a 36% increase in payments.
• There could be a reduction in young people above the parental income threshold and an increase in people with lower parental incomes, plus an increase in older students with low incomes (or low spousal income). The recession will have depressed incomes somewhat. Most of the trends by allowance type are actually quite consistent around the 28% average though – one of the few outliers is students living with an earning spouse, which are up 50%, but that’s only about 2%of students.
• Provider types are important. ITP student allowance numbers are up 31% while universities have had lower growth at 24% - this makes sense as universities were at about 103% of cap last year while ITPs were only 101%, so had more room to move. PTEs are up 33% and wananga up 59%, but both have small numbers, with wananga having a very low base.

Overall, though, I’m a bit stumped as to where the growth is coming from and whether it will level off during the year. It would be a good area to get some feedback from those in providers.