“They told us to study hard. They forgot to mention the rent.” For many university students in New Zealand today, this blunt reality has become the defining truth of their education journey. Behind the proud tradition of tertiary study lies a growing crisis: students juggling sky-high living costs, unpaid internships, and crushing mental strain — all while racking up tens of thousands in debt.
In an era when degrees once promised stability and opportunity, New Zealand’s young learners now face a far more complicated picture. The cost of living is skyrocketing, job security is no longer guaranteed, and unpaid work has become an unspoken expectation. The result? Graduates emerging barefoot into adulthood, weighed down by an average of $40,000 in debt and uncertain futures.
This article dives deep into the true cost of being a uni student in NZ, exploring how economic pressures, outdated educational expectations, and social inequalities combine to create a generational debt trap. With insights from students on the frontline and expert voices like Daniel Chyi, co-founder of Vidude, we unpack why the promise of education as an investment feels increasingly out of reach — and what must change for the next generation to thrive.
They told us to study hard, to chase that degree, to build a better future — but they forgot to mention the rent, the bills, the unpaid internships that chew up our time and our sanity. For today’s New Zealand university students, education feels less like an investment and more like a generational debt trap.
The soaring cost of living alone is enough to break spirits: skyrocketing rents, soaring grocery prices, and the pressure to juggle multiple jobs just to scrape by. Add to this the expectation of unpaid or low-paid internships, the emotional weight of mental health struggles, and the growing reality that a degree no longer guarantees a stable job, and you begin to see the hidden cost of “success.”
Many students find themselves barefoot in their dreams, only to emerge burdened with upwards of $40,000 in debt. This isn’t just a financial crisis — it’s a societal one. It’s a harsh reminder that while we are told education is the great equaliser, the system often deepens inequality and leaves our young people scrambling to survive.
Daniel Chyi, co-founder of Vidude, sums it up:
"Education should be a launchpad, not a pitfall. When students graduate drowning in debt and stress, we’ve failed to create a fair pathway to opportunity. It’s time we rethink how we value learning — and the real costs we ask young Kiwis to bear."
This article peels back the polished veneer of the university experience to reveal the raw truths underneath — the sacrifices, the struggles, and the urgent need for systemic change. Because no degree should come with a lifetime of debt and disillusionment.
1. The Rising Cost of Living for Uni Students in NZ
New Zealand’s university students face a harsh reality: living costs have ballooned far beyond what many expected when they first enrolled. From Auckland to Dunedin, rent prices have surged dramatically, often consuming more than half a student’s income or loan. Add to that the everyday expenses of food, transport, and essentials — and suddenly, studying full-time feels like a financial juggling act.
Rent: The Biggest Budget Crusher
In cities like Auckland and Wellington, average student rents have increased by over 20% in the last five years. Many students end up in cramped flats or sharing houses well beyond their comfort level, just to afford a roof over their heads. This constant stress on accommodation impacts not only their budgets but also their ability to focus on studies.
Food and Essentials: Stretching Every Dollar
Food prices have also risen steeply, with fresh produce and staple items often priced beyond what a student can comfortably afford. Students report skipping meals or opting for cheaper, less nutritious options just to survive. Transportation costs — whether buses or petrol — add another layer of strain, particularly for those commuting from outer suburbs or regional towns.
Inflation and Economic Pressures
The wider economic situation compounds these pressures. Inflation rates in New Zealand remain higher than historic averages, squeezing already tight budgets. Unlike many working adults, students rarely have the luxury of stable, full-time incomes, making them especially vulnerable.
Voices from the Frontline
Sarah, a second-year student in Christchurch, shares, “I work two part-time jobs on top of full-time study just to pay rent and bills. Some weeks I barely have enough left for groceries. It’s exhausting.”
These stories are echoed across the country, revealing that the rising cost of living is not just a statistic — it’s a daily battle affecting the mental health, academic performance, and overall wellbeing of Kiwi students.
2. The Debt Burden: Why $40,000 Is Becoming the New Norm
For many New Zealand university students, the dream of gaining a degree comes with a heavy financial price tag. It’s increasingly common for graduates to leave university with around $40,000 in student loan debt, a figure that has steadily climbed over the past decade and shows no sign of slowing.
How student debt accumulates
Student loans cover tuition fees, but they also stretch to cover living expenses such as rent, food, textbooks, and transport. Since the cost of living continues to rise, students are borrowing more each year just to stay afloat.
Additionally, many rely on loans to bridge gaps caused by unpaid internships or part-time jobs that don’t cover their full costs. This cycle leaves students borrowing not just for education, but for basic survival.
Long-term consequences of student debt
Carrying tens of thousands in debt impacts graduates long after they finish their studies:
Delayed milestones: Many graduates postpone buying homes, starting families, or investing in retirement because of debt repayments.
Financial stress: Monthly repayments add pressure on young earners starting their careers, reducing disposable income and savings.
Limited career choices: Some graduates feel forced to take higher-paying but less fulfilling jobs simply to manage debt.
Comparing generations
While student debt isn’t new, the scale today is unprecedented. Previous generations often graduated with little or no debt, but rising education and living costs have shifted this dramatically.
Student voices
James, a recent graduate from Wellington, says, “It’s tough knowing that for the next decade I’ll be paying off a loan that’s bigger than my first car. Sometimes it feels like the degree was just the start of a lifetime of financial stress.”
3. Unpaid Internships and Work Experience: The Hidden Price of Career Building
For many university students in New Zealand, gaining real-world experience is seen as essential to landing a job after graduation. But the reality is that this experience often comes at a steep, unpaid cost — one that can exacerbate financial pressures and widen inequality.
The expectation of unpaid work
Across industries such as media, marketing, and creative arts, unpaid internships have become the norm rather than the exception. Students feel compelled to accept these roles to build their CVs, despite struggling to afford basic living expenses.
This unpaid labour often requires students to work full weeks without pay, leaving little time for paid employment or study. The situation forces many to choose between financial survival and career progression.
Who bears the cost?
Unpaid internships disproportionately affect students from lower-income backgrounds who cannot afford to work for free. Those who can rely on family support or savings have a distinct advantage, deepening existing social divides.
The ethical dilemma
Critics argue that unpaid internships exploit student labour and create barriers to entry for those without financial safety nets. There is growing pressure for New Zealand companies and institutions to offer paid internships and fair work conditions.
Student experiences
Emily, a final-year communications student, shares, “I worked three unpaid internships during my degree. I had to pick up shifts at a café at night just to pay rent. It was exhausting, and I often felt like my career was costing me my health.”
Moving forward
The conversation around unpaid internships in New Zealand is gaining momentum, with calls for legislation and policies to protect students from exploitation. Until change happens, unpaid work remains a hidden but significant cost of education.
4. Mental Health Struggles Behind the Study Desk
Beyond the financial strain, university students in New Zealand face a mounting mental health crisis. The pressures of juggling study, work, and living costs are taking a serious toll on their wellbeing, with anxiety, depression, and burnout becoming alarmingly common.
The financial stress–mental health connection
Constant worry about paying rent, covering food bills, and managing student loans creates a heavy emotional burden. For many, this stress undermines their ability to focus on coursework, maintain social relationships, and take care of themselves.
Rising rates of mental health issues
Studies show that university students report significantly higher levels of mental health challenges compared to the general population. The combination of academic pressure and financial insecurity makes this group particularly vulnerable.
Barriers to accessing help
While universities provide counselling and support services, demand often outstrips availability. Stigma and lack of awareness can also prevent students from seeking help early, allowing problems to worsen.
Student stories
Liam, a third-year engineering student, reveals, “Between working two jobs and full-time study, I felt completely overwhelmed. I didn’t have time to see a counsellor, and my anxiety got worse until I almost dropped out.”
The need for systemic support
Addressing student mental health requires not just individual care but broader systemic changes — including affordable housing, living allowances, and policies that reduce financial pressure.
5. The Illusion of Job Security: Degrees No Longer a Guarantee
For generations, earning a university degree was seen as a reliable pathway to a stable job and financial security. In New Zealand today, however, this assumption no longer holds true for many graduates, leading to a harsh reality check for students investing time and money in higher education.
The shifting job market
New Zealand’s employment landscape is evolving rapidly, with automation, globalisation, and changing industry demands reshaping opportunities. Many graduates find their qualifications no longer match the jobs available, leading to underemployment or prolonged job searches.
Degrees vs. employability
Certain degrees remain in high demand, but others struggle to translate into direct career paths. Graduates in arts, humanities, and social sciences often face greater challenges finding full-time, well-paying work.
Graduate underemployment and unemployment rates
Statistics reveal an increasing number of graduates working in roles that don’t require a degree or working part-time involuntarily. This underutilisation of skills frustrates graduates and undermines the value of their education.
Financial and emotional impact
The disconnect between education and employment contributes to financial strain, delayed life goals, and diminished confidence. Graduates often juggle debt repayments alongside insecure work, amplifying stress.
Voices from the field
Anna, a recent graduate with a Bachelor of Arts, shares, “I thought my degree would open doors, but two years later I’m working casual retail and still searching for a career job. It feels like I’ve been sold a dream that doesn’t exist.”
Rethinking education pathways
This growing reality is prompting calls for better alignment between tertiary education and the labour market, as well as expanded support for vocational and alternative training options.
6. The Social Impact: How Student Debt Affects Life Milestones
The burden of student debt and financial stress doesn’t stop at graduation—it ripples through every aspect of young Kiwis’ lives, delaying key milestones and impacting social mobility across New Zealand.
Delays in home ownership
One of the most significant consequences of student debt is the postponement of buying a first home. With tens of thousands owed in loans, saving for a deposit becomes a steep uphill climb, keeping many locked out of the property market for years.
Starting a family later
Financial insecurity also influences decisions around family planning. Many graduates delay having children due to concerns about affordability, housing stability, and the ongoing weight of debt repayments.
Impact on savings and retirement
Student debt reduces the ability to save not only for immediate goals but also for long-term financial security. This can have knock-on effects on retirement readiness, potentially leaving a generation less prepared for the future.
Widening inequality and social mobility barriers
The debt trap disproportionately affects students from lower socioeconomic backgrounds, making it harder for them to break cycles of poverty. This undermines the ideal of education as a great equaliser.
Mental and emotional toll
The pressure of postponed life milestones often compounds mental health challenges, with graduates feeling left behind or trapped in financial limbo.
Real voices
Mark, a 28-year-old graduate, says, “I’ve had to put buying a house and starting a family on hold because of my student loan. It feels like I’m treading water while my peers move ahead.”
7. The Role of Universities and Government: Are They Doing Enough?
As student debt and financial strain deepen, questions arise about whether New Zealand’s universities and government are adequately supporting students or simply perpetuating a broken system.
University responsibilities
Universities have traditionally been seen as gateways to opportunity, but critics argue they’re increasingly acting like businesses prioritising enrolment numbers over student wellbeing.
Rising tuition fees and ancillary costs place a growing burden on students.
Limited financial aid and scholarships often fail to reach those who need it most.
Support services exist but are frequently stretched thin, especially mental health resources.
Government policies and funding
Government efforts to make tertiary education affordable have faced challenges:
Student loan and allowance schemes help but often don’t cover the full cost of living.
Recent policy tweaks address some issues but fall short of systemic reform.
Housing and living costs remain largely unaddressed in education funding models.
Student advocacy and voices
Students and advocacy groups are increasingly vocal about the need for change:
Campaigns call for tuition freezes, increased allowances, and paid internships.
Calls for investment in affordable student housing and mental health support grow louder.
Grassroots movements highlight the lived realities behind statistics.
The gap between policy and reality
While policies exist on paper, many students feel the lived experience is one of struggle and neglect. Closing this gap requires more than incremental changes—it demands a holistic approach to student wellbeing and affordability.
8. Alternative Pathways: Vocational Training, Apprenticeships, and Emerging Models
As the cost and challenges of traditional university study mount, more New Zealand students are exploring alternative pathways that offer practical skills, lower debt, and quicker entry into the workforce.
Vocational training and apprenticeships
Trades and vocational education provide hands-on learning and often come with paid apprenticeships, allowing students to earn while they learn. Fields such as construction, engineering, hospitality, and technology offer strong job prospects with lower upfront costs compared to university degrees.
Benefits of alternative pathways
Cost-effectiveness: Lower tuition fees and reduced living expenses.
Work-integrated learning: Real-world experience combined with study.
Faster entry into the job market: Many programs are shorter than university degrees.
Growing industry demand: Skills shortages in trades and technical fields increase employability.
Emerging educational models
Innovative models like micro-credentials, online certifications, and industry partnerships are expanding options for flexible, affordable learning. These cater to diverse learner needs and help bridge skill gaps in the evolving job market.
Changing perceptions
Historically, vocational routes were viewed as “second best” to university, but this stigma is fading as more employers value skills and experience over formal degrees alone. New Zealand’s education landscape is adapting to reflect these realities.
Success stories
Individuals who chose apprenticeships or vocational training often report greater financial stability early on, less debt, and strong career satisfaction.
9. Financial Literacy and Student Preparedness
A key factor in navigating the financial challenges of university life is financial literacy — yet many New Zealand students enter tertiary education without the necessary knowledge or skills to manage debt, budgeting, and expenses effectively.
The gap in financial education
Schools often lack comprehensive financial literacy programs, leaving students unprepared for the realities of managing money as independent adults. This gap contributes to poor budgeting decisions, overspending, and mounting debt.
Why financial literacy matters
Understanding loans, interest rates, living costs, and savings can empower students to make smarter choices, avoid unnecessary debt, and plan for their financial futures.
Current support and resources
Some universities and community organisations offer workshops, counselling, and online resources focused on money management, but these are often underutilised or inconsistently available.
The role of families and communities
Families play a crucial role in teaching financial skills, but not all students have this support, particularly those from disadvantaged backgrounds.
Student perspectives
Emily, a second-year student, says, “I wish I’d learned how to budget properly before starting uni. It would have made a huge difference in managing stress and avoiding unnecessary debt.”
Improving preparedness
To close this gap, New Zealand’s education system, families, and communities need to prioritise financial literacy — equipping students with the tools they need to survive and thrive financially throughout their studies and beyond.
10. A Call to Action: Rethinking Education as an Investment, Not a Trap
The current state of university education in New Zealand reveals a stark disconnect between the promise of opportunity and the lived reality of many students. As debt mounts, mental health struggles deepen, and job prospects grow uncertain, it’s clear that education is no longer the straightforward investment it once was — for too many, it has become a generational debt trap.
Systemic change is overdue
Meaningful reform requires bold action from government, universities, and society at large. This includes:
Increased funding for affordable housing and living allowances.
Policies to ensure internships and work experience are fairly compensated.
Expanded mental health services tailored to student needs.
Greater investment in alternative education pathways and vocational training.
Enhanced financial literacy education at all levels.
Empowering students and communities
Supporting students goes beyond financial aid — it’s about fostering environments where young people can thrive academically, emotionally, and financially. Universities must prioritise holistic wellbeing, and the government must recognize education as a public good vital to the country’s future.
The role of every Kiwi
Rethinking education as a true investment requires a collective effort — from policymakers to employers, families to communities. Raising awareness about these challenges and advocating for change is critical to ensuring that future generations can pursue their dreams without being weighed down by crippling debt.
Final words from Daniel Chyi, co-founder of Vidude:
"Education should open doors, not chain students to a lifetime of debt and anxiety. It’s time we rebuild our system so every Kiwi young person has a fair go — not just at study, but at life."
