The Labour Party has promised to abolish parental income testing on student allowances by 2012 if it is re-elected to Government.
Party leader Helen Clark announced the plan at Otago University on Monday to a crowd of 1,200 students.
She said income testing would be phased out, starting in January 2009 when the parental income threshold will increase from about $45,743 to about $50,318.
From January 2010 the threshold for receiving an allowance would rise to $70,000 and to $100,000 in 2011.
The parental income test would be abolished in January 2012.
"My dream has always been to enable our young people to have the kind of support my generation had when in full-time quality tertiary education", Miss Clark said.
"Under this policy, it is estimated that more than 50,000 students aged from 18 to 23 years will receive increased support through student allowances by 2012.
"Most of these students would receive no allowance under the current rules."
National plans allowance proposal
National Party deputy leader Bill English said National will also announce a new proposal affecting student allowances in the coming weeks, but it will not be a universal scheme.
Mr English told Checkpoint that students should be wary of the Labour initiative, given the amount of debt the country now has.
He said given the state of the Government's books, which are showing a "sea of red ink", the announcement of a universal student allowance has a "sense of unreality about it."
National Party leader John Key said the idea was good in principle, but said Labour cannot afford to implement the plan in the current financial situation without dropping something else it has pledged.
Better late than never, says Peters
New Zealand First leader Winston Peters said his party had advocated a universal student allowance for many years.
He said the proposal is "better late than never" but that Labour could acknowledge where it got the policy from.
The Green Party welcomed Labour's promise to phase in universal student allowances.
However its tertiary education spokesperson Metiria Turei said only the Green Party would make sure Labour delivered on its pledge.
