Acts of borrowing: women graduates' experiences of the New Zealand student loan scheme

Abstract

While a government initiative of integrated data collection aims to generate official statistics on the Student Loan Scheme (SLS), there is still a dearth of information about the broader social and economic implications of this policy introduced in 1992. Particular concerns have been expressed about SLS outcomes for women borrowers in the context of a gender pay gap and predictions that most women will take longer than their male counterparts to repay student debt. This study aimed to explore and describe women graduates' experiences of borrowing through the SLS by employing a qualitative methodology. Two focus groups were undertaken to locate emergent themes and these were explored further in four in-depth, semi-structured interviews. Data was analysed inductively using the constant comparative method and a 'framework' approach. The study found that the women's decisions to borrow through the SLS were pragmatic in the absence of viable alternative options to fund the tertiary education they wanted. Their acts of borrowing were complicated however by poor comprehension of the implications of borrowing at the outset. In fact, awareness of student loan debt implications first peaked after graduation with employment and the onset of compulsory repayment. The subsequent impact of SLS debt and repayment on the participants' lives and life choices was found to be considerable. It affected decisions about further education, employment, buying a house, having children, and saving for the future. Overall, the women felt their ability to plan their lives the way they want was being restricted by student loan debt. The similar experiences reported among research participants largely mirror the findings of other national and international studies. The findings underscore the importance of the SLS for women who lack other means to fund a tertiary education. Equally though, they suggest that the implications of borrowing may not be understood until the point at which they must be repaid. Given the evidence of the potentially far-reaching implications debt and repayment has in the lives of women graduates, this point is significant. This study therefore raises questions about aspects of student support policy. It also queries the implications of these outcomes for other social policy objectives around, for example, retirement savings, family support, fertility and demography. Consequently a number of recommendations are made including a re-evaluation of student allowance policy, improved advice for first time borrowers, incentives for voluntary repayment and debt write-off provisions to offset disincentives for parenting. Lastly, this study demonstrates the contribution qualitative research can have in providing social context for SLS outcomes to inform policy-makers, prospective borrowers and the public alike.