Remove the 7 year student loan cap for medical students


This has been a whirlwind week for the New Zealand Medical Students Association (NZMSA) with their campaign for an exemption on the 7EFTS cap on student loans becoming viral on both social media and mainstream media. This article aims to outline the issue and then provides links to our petition and One News snippet.

What is 7 Equivalent Full Time Student (EFTS) Points?

The 7 EFTS policy means students can only borrow for seven years’ worth of study. Once this limit has been reached, students can no longer claim any student loan or allowance from Studylink whatsoever, and are required to cover all study costs themselves. The 7 EFTS cap is intended to target students who are not finishing their degrees and move them into the workforce. However, the cap also disproportionately affects postgraduate entrant Medical students.

Postgraduate Medical Students, 7EFTS cap and Student Loans

In 2017 there will be approximately 143 postgraduate medical students in the class. Under the current regime, 90% of these students will lose access to student loan funding in this year due to hitting the 7 EFTS cap. They will then be expected to pay the $20,000 for their course without assistance from Studylink.

Currently, there are exemptions to the cap for those undertaking postgraduate and doctoral study. These students have been identified as deserving additional funding because they are high achieving students who require more time to complete valuable courses. We believe that postgraduate-entry medical students should also be included in this group and be given an exemption from the 7 EFTS cap.

Why does 7EFTS affect postgraduate-entry medical students disproportionately?

Postgraduate students commence a medical degree having already completed 3 or 4 EFTS, and they then have only 4 or 3 EFTS (respectively) available to them to complete their medical degree. These students comprise about 25% of the class in both New Zealand medical schools with plans to rise to 30%. A medical degree for a graduate entrant requires a total of 4.95 EFTS, meaning they will be unable to claim any funding for their ultimate and/or penultimate years of study.

Should medical students be exempt from the 7EFTS policy?

There are a couple of reasons why medical students should be exempt from the normal 7EFTS policy.
First, the course fees for a medical degree are approximately $15,000 per year, which is two to three times higher than most other courses. Where funding for living costs and course related costs is sought, the total may be over $20,000 per year. This makes it less very unlikely students can fund the fee requirements by themselves.

Secondly, due to the large course load a medical degree requires, students have less time to work to support themselves. This problem is especially evident in years 4-6 of the degree, where they are expected to spend at least 8am to 4pm in hospitals. Both medical schools advise against part-time work in recognition of the high course load demanded.

In defence of the EFTS scheme?

The Government has highlighted issues with introducing an exemption to the 7 EFTS cap for medical students. The first argument is that the cap is to ensure that students complete their degrees in the fastest time possible. However, postgraduate students are completing their degrees in the minimum possible time as allowed by the entry requirements.

The Government also argues that high achieving students are still able to complete a medical degree within the 7EFTS limit by entering through the competitive first-year entry scheme. Yet the Government has mandated a portion of spaces in New Zealand medical schools be reserved for graduate entrants. These students have maintained high grades throughout their degrees and are therefore high-achieving students who deserve to be funded.

Postgraduate medical students are important as they bring diversity to the claass with their varied backgrounds, are more likely to stay in New Zealand after graduation, and are more likely to become GPs. The medical schools want post graduate students because of the benefits they bring.
Why government funding is essential for post-graduate students.

The Government has suggested various alternatives to Study link funding. Unfortunately, none of these constitute a feasible option for all graduate entry students.

Trainee Intern grants: This is a $26,000 stipend received in a student’s final year of medicine. However, it is paid as a monthly stipend, whereas fees are required to be paid in advance, and is of no assistance to students who hit the 7EFTS cap in their penultimate year of study.

External Loans: No major banks are willing to extend credit to students with minimal income and no assets without a guarantor. As discussed earlier, not all students may access a guarantor, especially those from lower socio-economic groups. Moreover, the interest burden of a bank loan will be enormous, especially given it may be up to two years before income is generated to begin to pay it down.

Employment or Savings: To earn the $20,000 required to pay for the course and living costs, a student would need to work for at least 20 hours per week earning $20.00 per hour after tax, and save all of it in order to pay fees in advance. This is not feasible given the large course load of a medical student.

Our Solution

The existing exemptions framework could easily be expanded to include postgraduate entry medical students, and we strongly feel it should.

Show your support!

Find out more online, and make sure you sign the NZMSA petition.
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