The rising cost of being a student in New Zealand is creating significant financial strain, with many forced to borrow more, work long hours, or rely on parental support, according to students and economists.
Huda Jamali, an international student studying animal science at Massey University in Palmerston North, noted that while living costs were lower than in larger cities, they were still surprisingly high. A non-catered room in university halls costs around $230 per week, a price she deems too expensive. “I don’t recommend living in halls. I don’t feel it’s worth the price for the halls I’ve seen here in Palmerston North,” she said. She currently pays $270 a week for a room in a shared house, finding it a more worthwhile investment due to the increased space and comfort.
However, it’s the cost of food that has been particularly jarring. “Our groceries are incredibly expensive as well. Fresh produce is crazy. It’s very expensive and it’s so hard to eat healthy just because of the expensive fresh produce,” Jamali explained.
The financial pressures aren’t limited to Palmerston North. Darcy Nelson, a student at the University of Otago in Dunedin, described rent as “ridiculously expensive,” especially considering the condition of some properties. Rent increased from $205 to $220 per week during her studies. “It’s really crazy for what you’re paying for – it’s a room in a very, very cold mouldy house,” she said. Despite attempts to find part-time work, Nelson was unable to secure a job and had to increase her student loan to cover living expenses.
Nelson recounted the struggles of her peers, including a friend who subsisted largely on pasta due to financial constraints. Shared living situations also presented challenges, with disputes arising over high power bills – one bill reaching $900 between seven flatmates, exacerbated by poorly insulated housing and frequent leverage of appliances like dryers. Rent on Castle Street in Dunedin, a popular student area, has been increasing annually by $15 to $20 per week, with current rates reaching $250 to $260 per week.
Nelson moved back to Auckland to live with her parents and work while completing her studies. “I did two years there and two years is enough. I’ve got a couple of papers to complete and I’ll do it from Auckland, save my cash, save my money.”
Economist Shamubeel Eaqub of Simplicity highlighted the dramatic increase in the cost of student life since 2005. He noted that in 2005, a student allowance of $160 covered essential costs of $140, leaving a $20 buffer. However, by 2025, that buffer had flipped into an $8 weekly shortfall, even before accounting for textbooks, transportation, or social expenses. Rent has risen to $193 per week, and food costs now stand at $96.
Data from the Ministry of Social Development shows a 5.2% increase in students receiving financial assistance through the student allowance scheme in the first quarter of last year, with just under 35,000 students receiving an average of $1882 in payments – a 3% decrease from the previous year. The maximum weekly allowance for students under 24 living with parents is $277.72, while those living away from home receive $323.33. Eligibility for the allowance is dependent on both the student’s income and, for those under 24, their parents’ income.
Students whose parents earn over $69,935.32 annually before tax, or who have parents owning assets exceeding $127,701.81 (while living at home) or $137,187.86 (while living away from home), may receive a reduced allowance or be ineligible altogether. Those who do not qualify for an allowance can borrow additional funds for living costs, but these loans must be repaid.
Eaqub pointed out that rents in Dunedin and Palmerston North, which were 60% of Auckland prices in 2015, now represent over 80% of Auckland’s rental costs. University tuition fees have increased by 113%, and polytechnic fees by 60%. The median student loan balance has risen from $10,000 in 2005 to $24,000 in 2023.
Eaqub also questioned the financial payoff of a tertiary education, noting that while a qualification still provides an advantage, the field of study and the chosen sector are now more critical than simply possessing a degree. He suggested potential solutions including indexing student support to living costs, redirecting KiwiSaver subsidies to help with education expenses, addressing the housing crisis, and reimagining the student loan scheme, potentially through income-contingent repayment options, repayment holidays during periods of low income, or even limited debt forgiveness for professions with demonstrable public benefit, such as teaching, nursing, and social work.
