New Zealand spends £1.6m to ward off loan debacle

The New Zealand government is to spend an extra NZ$6 million (£1.6 million) on the processing of student loans and allowances in a bid to avoid the debacle that dogged university and polytechnic enrolments this year.

At the beginning of the year, thousands of students were frustrated by delays and problems in the processing of their loans and allowances by the Department of Work and Income, which had just taken over responsibility for the loans processing.

The extra funding will be used to improve departmental staffing levels and waiting times on the student services phone line, and to provide limited networked on-campus services to students at 34 campus locations nationwide.

The announcement has pleased the National University Students' Association, whose president, Sam Huggard, said he was "cautiously optimistic" there would not be a repeat of the "massive problems" of the past two years.

The package announced by Steve Maharey, associate minister responsible for tertiary education, picks up on recommendations from an independent evaluation commissioned by the government, which includes performance standards for staff to meet.

"The department will be held accountable for its performance this summer. While I expect that there will be individual cases of processing delay that will be put right immediately, I do not expect to see the type of widespread systemic failure that the government inherited this past summer," Mr Maharey said.