A pale and scrawny student loan victim
For ages, I couldn’t understand what I was doing wrong.
I worked hard and achieved well in a full-time professional role.
I lived pretty frugally: Primarily second hand wardrobe, still (embarrassingly) going to the same cheap bars I frequented as a student, used a motorbike (or legs) instead of a car. Rarely bought cheese.
None of my expenses (insurance, rent, ¼ mortgage on the cheapest house in Henderson) seemed extravagant for a hard working 30 year old professional with a great education. None of my desires (a trip to the dentist, a holiday once a year, the ability to contribute 4% to Kiwisaver) seemed unreasonable.
I had no dependants other than one very cost-effective cat.
I didn’t expect to be living like Carrie Bradshaw. But I didn’t anticipate my shoe collection would be a bunch of battered boots and tatty heels sitting in a bag until I had enough money to take them to the cobbler.
Then it hit me.
Student loans.
Student loans came into force after high tertiary education fees were introduced in 1991. Previously, university education was essentially free. The average annual university fee was $4000 by the time I was studying. A BA, an MA, necessary living costs (I also worked all through my studies) and a botched year failing to learn audio engineering later, and I had a pretty sizeable loan. That loan is still coming out of my pay packet, in very noticeable chunks, and will continue to do so for another 4-5 years (longer if the next government decides to reintroduce interest). The day my payments end I’m going to feel like I’ve won lotto. But in the meantime, I’m part of the first wave of people with student loans in the workforce, struggling to make ends meet in a professional role.
The worrying results of high student fees and student loans:
But I can’t help wondering whether incomes will ever catch up to the level demanded by student loans, or whether high education fees are slowly but surely contributing to social problems and class divides we can’t even fathom yet.
Interesting Salient article on student fees here.
I worked hard and achieved well in a full-time professional role.
I lived pretty frugally: Primarily second hand wardrobe, still (embarrassingly) going to the same cheap bars I frequented as a student, used a motorbike (or legs) instead of a car. Rarely bought cheese.
None of my expenses (insurance, rent, ¼ mortgage on the cheapest house in Henderson) seemed extravagant for a hard working 30 year old professional with a great education. None of my desires (a trip to the dentist, a holiday once a year, the ability to contribute 4% to Kiwisaver) seemed unreasonable.
I had no dependants other than one very cost-effective cat.
I didn’t expect to be living like Carrie Bradshaw. But I didn’t anticipate my shoe collection would be a bunch of battered boots and tatty heels sitting in a bag until I had enough money to take them to the cobbler.
Then it hit me.
Student loans.
Student loans came into force after high tertiary education fees were introduced in 1991. Previously, university education was essentially free. The average annual university fee was $4000 by the time I was studying. A BA, an MA, necessary living costs (I also worked all through my studies) and a botched year failing to learn audio engineering later, and I had a pretty sizeable loan. That loan is still coming out of my pay packet, in very noticeable chunks, and will continue to do so for another 4-5 years (longer if the next government decides to reintroduce interest). The day my payments end I’m going to feel like I’ve won lotto. But in the meantime, I’m part of the first wave of people with student loans in the workforce, struggling to make ends meet in a professional role.
The worrying results of high student fees and student loans:
- Decline of living standards. Student loan repayments are severely injurious to my ideal way of life, and ironically, also affect the way I’m perceived at work. (“Oh her. Why does she always wear second hand clothes in the office? What a hippy. Let’s never give her a promotion.”)
- Class divide. The rich, who perhaps didn’t pay their fees themselves or who paid their loans back quickly, are able to pocket and invest more of their salaries, for longer. The poor and middle class are bonded to student debt for years or decades, thus being even less likely to invest in home ownership, start-up businesses, retirement, other financial interests, or their children’s educations
- Gender divide. No allowance is made for women who take time away from the workforce to raise children. Given that in most circumstances a family is created with the willing participation of two parties, the fact that the woman (or primary caregiver) is one who has to suffer financially – not only by missing out on possible promotions, but in potentially having a student debt for life – is blatant discrimination
- Impact on families. I certainly wouldn’t want to have a kid until I’d paid off my loan, and I can’t be the only woman who feels that way. (It also occurs to me that Working for Families could be in part necessitated by couples who are unable to make ends meet because of their student loans… but that’s a whole other blog entry)
- Brain drain. ‘Nuff said.
But I can’t help wondering whether incomes will ever catch up to the level demanded by student loans, or whether high education fees are slowly but surely contributing to social problems and class divides we can’t even fathom yet.
Interesting Salient article on student fees here.
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