Changes to Student Loans and Allowances
Details of the changes to Student Loan and Student Allowance eligibility criteria announced by the Government on Thursday 20 May 2010.
On this page:
Student Loan Fee Changes
From 1 January 2011 the Student Loan administration fee is changing.
The current StudyLink administration fee will:
- be renamed the establishment fee
- increase from $50 to $60.
The establishment fee will be charged every time you open a new loan account from 1 January 2011.
The Government has also announced that a $40 annual administration fee will be introduced for Student Loans that are transferred to Inland Revenue. This fee is subject to legislation expected to be introduced later in 2010.
It is expected that the administration fee will:
- not be charged any year where a student also had a StudyLink establishment fee charged
- be charged each tax year from the tax year ending 31 March 2012.
Changes to Residency Requirements for Student Loans
From 1 January 2011 permanent residents and Australians will be subject to a two year stand down before they can receive a Student Loan. This means they will need to have lived in New Zealand for at least two years and be ordinarily resident in New Zealand in order to get a Student Loan. Permanent residents also need to have held permanent residence for at least two years to qualify.
Some people will not need to meet the two year requirement. This includes:
- anyone who was sponsored into New Zealand by a family member who holds refugee status
- people with protected person status (under the Immigration Act 2009).
If a student studied in 2010 and doesn't yet meet the two year requirement they may be able to continue to get a Student Loan until they complete their current qualification or for a maximum of two years - whichever occurs first.
To continue receiving a Student Loan the student must be studying towards the same qualification that they have received a Student Loan for in 2010.
As a transition measure only, applying to applications for study starting between 1 January and 31 July 2011, an exemption to the 2 year requirement may be granted to students who do not meet the residency criteria but who can demonstrate: they were committed to undertaking study for some time, would not be able to undertake that study without a loan, and that an exemption should be granted on compassionate grounds due to their personal circumstances.
Changes to Residency Criteria for Student Allowances
Current residency criteria for Student Allowances
Permanent residents and Australian citizens are subject to a two year stand-down before they can receive a Student Allowance. This means they need to have lived in New Zealand for at least two years and be ordinarily resident in New Zealand in order to get a Student Allowance. Permanent residents also need to have held permanent residence status for at least two years.
Refugees do not need to meet the two year requirement.
Changes to residency criteria
The Government has announced that the following groups will also not be required to meet the two year stand-down for Student Allowances:
- anyone who is sponsored into New Zealand by a family member who holds refugee status (from 1 January 2011)
- people with protected person status (this was part of the new Immigration Act passed in 2009).
This change brings the residency criteria for Student Allowances and Student Loans in line.
Lifetime Limit for Student Loans
From 1 January 2011 there will be a lifetime limit of 7 EFTS (equivalent full-time student) for Student Loans.
The EFTS count includes all study a student had a Student Loan for from 1 January 2010.
Full-time students have study loads of between 0.8 EFTS and 1.2 EFTS for a year. For a full-time student, 7 EFTS is equal to about 7 or 8 years of study. Part-time students use less EFTS each year.
Once any part of the Student Loan is used, such as living costs, fees, or course-related costs, that loan will count towards the 7 EFTS limit.
The 7 EFTS limit may be extended in these situations:
- If a student enrols in a course which, in the one year of study, will take them over the 7 EFTS limit, they will be able to use a Student Loan to complete that year of study.
- An additional 1 EFTS is available for post graduate study.
- Up to an additional 3 EFTS are available for doctoral study.
Generally, a student will not be able to receive more than 10 EFTS of Student Loan entitlement including these extensions.
Withdrawing from your course
If you withdraw from a programme within 30 days of the date it started, and receive a refund of all of your tuition fees before the end of that programme, it is not included in your lifetime limit.
Performance Requirement for Student Loans
From 1 January 2011 a performance measure will be introduced for Student Loans.
In order to keep their eligibility to receive a Student Loan a student will have to pass at least half of their course load (EFTS) over a set period.
How is this calculated?
- The assessment of performance applies for courses of study ending in 2009 or later.
- The EFTS count starts once a student has used one or more parts of the Student Loan (eg living costs, course fees, or course-related costs).
- To give students time to adjust to tertiary study a student's performance will be assessed once they have used 1.6 EFTS. This is about two years of full-time study.
- Once a student has completed 1.6 EFTS of study, they will need to have passed at least half the EFTS of their previous study in order to continue receiving a Student Loan. This performance is assessed using a rolling five year assessment period.
If students lose access to the Student Loan they can regain it by studying without a Student Loan until they have passed at least half the EFTS of their total study. Students can also regain access to the Student Loan by providing evidence that there are reasons beyond their control for not passing at least half. A student's average results may also change as previous study drops out of the rolling five-year period.
If a student has failed the student loan performance test and can demonstrate that they have made a very strong improvement in their performance during 2010 (i.e. they have passed more than 70% of their EFTS for study completed in 2010), then they may be eligible to retain their student loan eligibility. They will need to apply to have their situation considered. This is a transition measure and will only be available for students who have studied full-time for 2009 and 2010, and have their performance assessed for study in 2011.
Withdrawing from your course
If you withdraw from study within 30 days of your study start date, and receive a refund of all of your tuition fees before the end of your programme, that course is not included in your performance test.
92 week Student Allowance limit for secondary study
Secondary school study is currently exempt from the 200 week lifetime limit for Student Allowances. This is to ensure financial support was available to those students who require extra preparation before undertaking tertiary study.
From 1 January 2011 access to Student Allowances at secondary school will be limited to a total of 92 weeks. This is equal to around two school years. This entitlement will be in addition to the 200 week entitlement available at tertiary level.
The 92 week limit will include all secondary study the student has had a Student Allowance for since 1 January 1999.
Excluding Student Allowance for Superannuitants and Veterans Pensioners
From 1 January 2011 people receiving New Zealand Superannuation or a Veterans Pension will no longer be able to receive a Student Allowance at the same time.