Background
The decision to transfer loans was based on the following concerns identified by government about the administration of student loans:
- the reluctance of some tertiary institutions to accept accountability for the administration of loans;
- the potential for inconsistent treatment of loan assessment of entitlement across institutions caused by the variety of systems and processes used;
- the variability of the internal controls within each tertiary institution's loan application processes;
- the escalating cost of contracting loan assessment services from tertiary institutions, particularly in response to demands for tighter internal controls and improved services;
- the creation of perverse incentives due to the way some tertiary institutions used the availability of loans to market their courses. (In this context there was a need to reinforce that the fact that the student's liability was with the Crown not the institution);
- the lack of opportunity both to integrate the processing of loans and allowances and thereby achieve efficiencies by reducing duplication of effort in the collection of some assessment information, and to realise potential for improvement in workflow management.
It is difficult to compare processing for 2000 with processing under the previous system as comprehensive, national statistics are not available. However, statistics show that DWI was significantly behind the number of loan accounts established under SLAM for 1995-1998 (see Appendix 2) and only overtook past years' numbers in mid March/April. The total number of loans processed for 2000 is greater than previous years. Many students, such as Maori, Pacific Island people, or ESOL groups (such as refugees) have particular difficulty applying by phone.
Both students and institutions experienced delays in processing of student loans for the 2000 academic year. For students, delays resulted in difficulties paying for rent, food, course materials and caused frustration, stress and hardship. For institutions, delays caused cashflow problems and uncertainty around the validity of the enrolment process. These delays also showed up shortcomings in contingency planning, such as adequate information on access to Special Needs Grants (SNGs).
Purpose and Objectives
The purpose of this evaluation is to identify the problems experienced in processing student loans for the 2000 academic year and find solutions to them. The objectives are to ensure that operational changes are developed and implemented that will enable efficient delivery of student loans in the 2001 academic year.
The evaluation specifically addresses the following:
- clarification of delivery problems of student loans and the extent to which students were affected;
- issues that contributed to delivery problems regarding student loans in early 2000, including delivery of student allowances;
- recommended solutions to those problems; and
- who is responsible for resolution, by when.
The Terms of Reference are contained in Appendix 1, including a list of the organisations from whom submissions were sought.
Methodology
The evaluation was conducted during May 2000. It was commissioned by the Ministry of Social Policy at the request of the Minister of Social Services and Employment. A concentrated timetable was agreed in order to allow maximum time to fully develop and implement solutions in time for the 2001 academic year. The emphasis has been on solutions.
The evaluation was conducted under a Steering Group consisting of officials from the Ministry of Social Policy (chair), the Ministry of Education, and the Department of Work and Income. The actual evaluation was carried out by an independent contractor, Karen Erenstrom Associates Limited.
Input was sought from stakeholders, including issues of history, problems and solutions concerning the delivery of student loans. Representative organisations were invited to make submissions (see Appendix 1). All bar one responded. Visits were made to a small number of institutions, given the limited timeframe. Relevant government agencies were interviewed, and documents and reports relating to the scheme were reviewed. In addition, the submissions made to the Ministerial Review into the Department of Work and Income, presented to the Minister of State Services on 8 May 2000 (the Hunn Report) which related to student loans were made available to this evaluation.
Since respondents were specifically asked for information on problems and solutions, the emphasis in this report has also been on these matters. This bias is reflected in the report and quotations from respondents. Some positive comments were received, and these have been noted.
Exclusions
This evaluation is not a review of the performance or accountability of DWI as an organisation or of any of its individual staff members. Those are matters for the State Services Commission and other agencies. Comments made are directed at the design and implementation of the processes for student loans, not at any individuals, and should not be seen as a judgement of performance.
This evaluation is not a review of the strategic policy for the student loan scheme, tertiary resourcing in general, or any related benefit schemes. The evaluation has been conducted under the assumption that the broad parameters of the loan scheme will continue to be in place for 2001. Certain "operational policy" or definitional matters are commented on only to the extent that they affect the efficient, effective, consistent and equitable operation of the loan scheme.
This evaluation is not a review of individual cases, either for students or institutions. Much information has been gathered that discusses detailed situations, but this has been used to the extent that it provides insight into more systemic issues. Other avenues exist for individuals or institutions to resolve their particular issues.
Lastly, this review does not include a financial review of the costs of delivering student loans for the 2000 academic year nor does it cost options for delivery for the 2001 academic year. Options, such as a more effective on campus presence and improved staff training, are likely to involve costs - but are also expected to save costs in terms of eliminating errors and delays downstream in the process.
Format of This Report
This report is divided into two main parts:
- the original design of the student loans delivery system, and
- issues and solutions.
The first part reviews DWI's objective, style, structure, systems, and staff and skills as they relate to the design of student loans delivery system. The second part discusses more specific issues and solutions to both the design and implementation of the system from the point of view of the two major groups of stakeholders: students and institutions.
Appendices contain more detailed supporting information: statistics on the processing of loans for the 2000 academic year; flowcharts of the loans system; a timeline of key events; and a summary of issues and suggested solutions from students, institutions, and other government agencies.
