Student Loans

Analyses of Student Loans

The Education Counts website contains a number of analyses of student loans. Many of these are drawn from the integrated dataset on Student Loan Scheme borrowers who link data from the three agencies that manage the scheme. More information about the integrated dataset is available on the Statistics New Zealand website.

The Student Loan Scheme Annual Report

The agencies produce an annual report on the Student Loan Scheme. That report is tabled each year in Parliament. These annual reports contain borrowing statistics, data on the level of people's loans, repayment information, information on the costs of the loan scheme and the financial statements. The most recent annual reports may be downloaded from the Education Counts website. 

Eligibility for student loans

For information on eligibility, or to apply for a student loan, go to the StudyLink website.

Interest free student loans

In December 2005, Parliament passed legislation making student loans for borrowers living in New Zealand interest free from 1 April 2006. The interest free policy applies to existing and new loan borrowers.

From 1 April 2006, student loans for borrowers living in New Zealand for 183 or more consecutive days will be interest free. If you are eligible, interest charged from this date to your student loan account will be written off after the end of each tax year (31 March). You don't need to do anything to get your interest written off. Inland Revenue will automatically write off all the interest charged from 1 April 2006, including any interest charged by StudyLink, after the end of the tax year.

If you do not satisfy the 183-day requirement for an interest free student loan, you may qualify for an exemption. Borrowers must meet certain conditions and provide proof to support an exemption application.

If you are eligible you will continue to see interest charged on your Inland Revenue and StudyLink student loan statements - but this interest will be written off after the end of each tax year.

Interest free student loans do not cover interest charged before 1 April 2006.

The first write-offs under interest free student loans will occur in April 2007.

If you live overseas and you haven't been granted an exemption from the 183-day requirement, you won't be eligible for an interest free student loan. However, once you have returned to New Zealand and satisfy the 183-day requirement, you will be eligible.

Once you have returned to New Zealand, you can travel overseas during this 183-day qualifying period for short visits of up to 31 days in total without breaching the 183-day requirement. Periods overseas of up to 31 days are counted as though you have remained in New Zealand.

For more detailed information on interest free student loans, visit the IRD website.

Changes to overseas repayment obligations

Student loan borrowers are required to repay their loan according to rules set out in legislation.  In April 2007 parliament passed the Student Loan Scheme Amendment Act 2007 which simplified the calculation of the overseas repayment obligation.  Now borrowers who live overseas are required to pay no more than $3000 per annum – however the option to make voluntary repayments remains and is still encouraged.

New overseas repayment obligation

In addition former students planning to travel overseas after 1 April 2007 are eligible for an automatic “repayment holiday”, exempting them from making any loan repayments for a period of up to three years.  Student’s who were already overseas at this date may be eligible depending on their individual circumstances.  However, while overseas interest is still charged on the loan - a “repayment holiday” is not an “interest holiday”! 

For more details visit the IRD website. 

Student Loan debt projections

In March 2007 Student Loan aggregate balance first exceeded $9 billion.  The Student Loan Scheme debt continues to grow mainly because new lending greatly exceeds repayments.

Forecast lending and repayments for five fiscal years

Aggregate loan balances and the forecast value of the student loan portfolio

This projection was prepared in April 2007

Future developments on this site

The change to an interest-free Student Loan Scheme is leading to a change in many of the analytical approaches to the scheme. Over time, the Ministry of Education and the other agencies that manage and monitor student loans will be developing repayment time forecasts, longer term forecasts of the aggregate loan balance and a repayment time estimator.