Every year, thousands of talented young New Zealanders face an impossible choice: pursue higher education and accumulate crushing debt, or enter the workforce immediately to avoid financial hardship. This shouldn't be a choice at all. In one of the world's wealthiest nations, we have the resources and the moral imperative to make tertiary education free and provide students with a tax-free living allowance equivalent to minimum wage. The question isn't whether we can afford it—it's whether we can afford not to.

The Student Debt Crisis Is Holding Back a Generation

The current student loan system has created a generation burdened by debt before they've even entered the workforce. The average student graduates with over $30,000 in loans, with many owing significantly more. This debt follows young people for years, sometimes decades, affecting their ability to buy homes, start businesses, or even start families.

But the financial burden extends beyond tuition. Today's students face a toxic combination of rising living costs, stagnant part-time wages, and an inadequate student allowance system that forces many to work 20-30 hours per week while studying full-time. This isn't just stressful—it's actively undermining the quality of education students receive. How can we expect students to excel academically when they're working late shifts to afford rent and groceries?

"This isn't merit-based education; it's a system that advantages the already advantaged."

The current system doesn't just affect students—it perpetuates inequality. Students from wealthy families can focus entirely on their studies, while those from working-class backgrounds must juggle employment, academic work, and financial stress. This isn't merit-based education; it's a system that advantages the already advantaged.

An Investment That Pays for Itself

Critics inevitably ask: who will pay for it? The answer is simple—we all will, through a fairer tax system, because we all benefit. Free tertiary education isn't a cost; it's an investment in our economic future that generates returns many times over.

Graduates with degrees earn significantly more over their lifetimes, paying substantially more in taxes. They're less likely to require social assistance, more likely to start businesses, and more likely to contribute to innovation and productivity growth. Countries with free or heavily subsidized tertiary education consistently outperform those with expensive, debt-based systems on measures of social mobility, innovation, and economic equality.

Consider the Nordic countries: Finland, Norway, and Sweden offer free university education and generous living stipends. Their economies thrive, their innovation indices are among the world's highest, and they consistently rank at the top of global happiness and quality-of-life measures. This isn't coincidence—it's the result of treating education as a public good rather than a private commodity.

The Living Allowance: Enabling Academic Excellence

Free tuition alone isn't enough. Students need to eat, pay rent, and cover basic living expenses. The current student allowance system is wholly inadequate—many students don't qualify at all due to parental income thresholds, and those who do receive amounts well below what's needed to survive in our expensive housing market.

A tax-free living allowance equivalent to full-time minimum wage—currently around $44,000 annually before tax—would fundamentally transform tertiary education. Students could focus entirely on their studies, participating fully in research opportunities, internships, and extracurricular activities that enhance their education and employability. They could afford nutritious food, adequate housing, and the mental bandwidth to excel academically.

"We don't expect tradespeople to work for free while learning their craft; why should we expect university students to subsidize their own education?"

This isn't radical—it's recognizing that being a full-time student is full-time work. We don't expect tradespeople to work for free while learning their craft; why should we expect university students to subsidize their own education through part-time employment that detracts from their learning?

Economic Benefits Beyond the Individual

The benefits of this system extend far beyond individual students:

  • Increased enrollment: When education is truly accessible, more people pursue it. This means a more skilled, adaptable workforce ready to meet the challenges of a changing economy.
  • Better mental health outcomes: Financial stress is a leading cause of mental health issues among students. Adequate support would reduce anxiety, depression, and dropout rates.
  • Stronger local economies: Students with living allowances spend money in their communities—on rent, food, entertainment, and services—supporting local businesses and creating jobs.
  • Reduced inequality: Free education with living allowances levels the playing field, ensuring talent and ambition—not family wealth—determine educational outcomes.
  • Long-term economic growth: Countries with highly educated populations consistently outperform in innovation, productivity, and GDP growth. Education is the foundation of a knowledge economy.

Addressing the Counterarguments

Some argue that free education devalues degrees or leads to wasteful spending. The evidence contradicts this. Countries with free tertiary education maintain rigorous academic standards and produce world-class graduates. Others claim it's unfair to taxpayers who don't attend university. But we all benefit from living in an educated society—from having skilled doctors, engineers, teachers, and researchers. We don't complain about paying for primary schools we didn't attend; why should universities be different?

The concern about cost is legitimate but overstated. New Zealand already spends billions on education and student support. Restructuring this spending, combined with modest tax reforms targeting high earners and corporations, could easily fund free tertiary education and living allowances. Consider that we found billions for COVID-19 relief packages—surely investing in our young people's futures warrants similar commitment.

Some worry students will abuse the system, treating university as a paid holiday. This condescending view ignores reality. Most students are motivated individuals eager to build their futures. Academic requirements and progress monitoring can ensure allowances go to those genuinely pursuing their education. The tiny minority who might abuse the system shouldn't prevent us from supporting the vast majority who would thrive.

A Practical Implementation Path

Implementing this system needn't happen overnight. A phased approach could begin with abolishing tuition fees for high-priority fields—healthcare, education, engineering, and sciences—where we face critical shortages. Simultaneously, we could increase the student allowance incrementally, removing parental income thresholds and raising payments toward minimum wage levels over several years.

Funding could come from multiple sources: a modest financial transaction tax, closing corporate tax loopholes, introducing higher marginal tax rates for top earners, or redirecting some of the $1.9 billion currently spent on student loans. The key is political will, not economic feasibility. We've proven we can mobilize resources for crises; education should be recognized as the long-term crisis it is.

The Moral Imperative

Beyond economics, there's a fundamental question of values. What kind of society do we want to be? One that saddles young people with debt for pursuing education, or one that invests in their potential? One that perpetuates inequality through financial barriers, or one that provides genuine equality of opportunity?

Education is the great equalizer, the pathway out of poverty, the engine of social mobility. But only if it's genuinely accessible. Right now, our system tells young people from disadvantaged backgrounds that their dreams of higher education come with a price tag their wealthier peers don't have to consider. This is fundamentally unjust.

We pride ourselves on being a fair, egalitarian society. Yet we've created an education system that advantages the wealthy and burdens everyone else. Free tertiary education with adequate living allowances isn't radical—it's simply making our actions match our values.

The Time Is Now

We stand at a crossroads. We can continue with a system that burdens young people with debt and forces them to choose between education and financial security. Or we can follow the example of successful nations worldwide and recognize tertiary education as a public good worthy of public investment.

The students of today are the workforce, the innovators, the leaders of tomorrow. How we support them now will determine what kind of future New Zealand we build. Every year we delay is another cohort graduating with debt, another generation of potential unrealized, another opportunity for progress lost.

"Education is not a privilege to be purchased by the wealthy. It's a right to be guaranteed for all."

Free tertiary education and minimum wage living allowances aren't utopian fantasies—they're pragmatic policies adopted by our peer nations with demonstrable success. The only question is whether we have the courage to demand better for our young people, and the political will to make it happen.

Education is not a privilege to be purchased by the wealthy. It's a right to be guaranteed for all. It's time New Zealand started acting like it.