Changes in Student Allowances in 2007

Recent Changes

From 1 January 2007, the lower parental income testing threshold for students under the age of 25 with no dependents was further increased by 10 percent to $39,270 per annum. The cut-out points were raised to $63,385 for students living at home and $69,413 for students living away from home. From 1 April 2005, these parental income limits have been adjusted annually to reflect changes in the cost of living.

From 1 January 2007 also:

• PhDs and professional doctorates were added to the list of recognised long programmes;
• the entitlement to student allowances and loans was aligned to tuition subsidy funding – meaning that if a qualification doesn’t qualify for funding, then students studying for that qualification are not eligible for allowances or loans.
  

In 2007, the number of recipients increased by 3,100 (5 percent) and reached about 62,500.  The change in numbers was entirely due to the increase in the number of students under the age of 25 who received targeted, parental income-based allowances. The tertiary education organisations that mainly contributed to the change were universities (57 percent of the increase) and polytechnics (28 percent of the increase). About 98 percent of additional recipients at universities and polytechnics studied at degree level and above.

In 2007, expenditure on allowances increased by $12 million (3 percent) and reached $386 million. The average annual gross allowance decreased by 2 percent to $6,200. The median allowance in 2007 was $5,900. The decrease in the average annual allowance mostly occurred due to an increase in the proportion of relatively inexpensive parental income-based allowances.  The tertiary education organisations that mainly contributed to the decrease in the average annual allowance were universities (46 percent of the decrease) and polytechnics (38 percent of the decrease).

Figure 2:  Distribution of allowances received in 2007