Changes to Student Loans and Allowances

Student Allowance changes for postgraduate study

The Student Allowance will no longer be available for postgraduate study that starts on or after 1 January 2013 (except Bachelor degrees with honours).

Postgraduate students can continue to access Student Loans to finance their study. Students can also test their eligibility for additional support like an accommodation supplement depending on their personal circumstances.

Students with current Student Allowance applications for study that starts in 2012 and finish in 2013 will continue to be eligible until the end of that application.

Students who apply for Student Allowance in 2013 for a period of study that started in 2012 will not be affected. The date that their payments start from will be determined by the date they applied or the date they became eligible due to a change in their circumstances.

Students who need to reapply for a Student Allowance for 2013 to complete postgraduate study will not be eligible for a Student Allowance for that study, unless they have been receiving a Student Allowance with a partner or child/ren.

Students with a partner or child/ren can continue to receive a Student Allowance for up to one year, until 31 December 2013, or until they use up their 200 week lifetime entitlement to Student Allowance, whichever comes first. The student must be continuing the same qualification and not a follow on or higher qualification (for example the student cannot be moving from a postgraduate diploma to a masters).

Students do not need to do anything to qualify for this exemption.

Exemptions to the 200 week lifetime limit for Student Allowance will be removed

All exemptions to the 200 week limit for Student Allowance will be removed from 1 January 2013, except for special circumstances.

Exemptions will no longer be available for long programmes and recognised National Interest programmes (currently only teacher training).

Students with an exemption approved for study that starts prior to 1 January 2013 will continue to be eligible until the end of the period approved.

Students can only apply for an extension to their 200 week limit during the period of study in which their entitlement will run out.

Note: The special circumstances exemption does not include any change to the policy as a special circumstance.

Maintaining the Student Allowance parental income threshold at the current limit

The current Student Allowance parental income threshold of $55,027.96 will be maintained without CPI adjustment until 31 March 2016.

Student Allowance rates and personal and joint income thresholds will continue to be reviewed on 1 April each year.

Student Loan borrowing limits for pilot training students

Pilot training students will be limited to borrowing up to $35,000 per EFTS from the compulsory fees component of the Student Loan. The amount of fees that a student can borrow is relative to the EFTS they are enrolled in. This means if a student is enrolled in 0.5 EFTS they will only be able to borrow $17,500 for their compulsory fees.

Existing pilot training students who have been enrolled (but not necessarily accessed the Student Loan Scheme) on a pilot training course at any time between 1 January 2009 and 31 December 2012 will continue to have access to their full compulsory fees until 31 December 2015 while they complete their qualification.

Student Loan annual borrowing limits

Students will only be able to borrow for up to 2 EFTS worth of study each year.

A year of full-time study is usually between 0.8 EFTS and 1.2 EFTS, which means that this change will impact on students with heavy workloads or those who change courses during the year.

Changes to Student Loan repayments

Increasing the repayment rate for Student Loan borrowers

From 1 April 2013, the Student Loan repayment rate will increase from 10 cents to 12 cents in every dollar earned over the repayment threshold of $367 per week or $19,084 annually.

Voluntary repayment bonus

Currently students who make voluntary payments of $500 or more within a tax year on top of their Student Loan repayment obligations qualify for an additional 10% bonus that is credited to their loan account.

The voluntary repayment bonus will be removed from 1 April 2013.

New matching agreement between New Zealand Customs Service and Inland Revenue

The information match between Inland Revenue and the New Zealand Customs Service will be extended to identify Student Loan borrowers in serious default, so Inland Revenue can immediately initiate contact with the borrower.

Broadening the definition of income for Student Loan repayments

The definition of income for Student Loan repayment purposes is being extended to better align with the Working for Families definition and the parental income test for Student Allowances. This change will come into affect as of 1 April 2014.

Last updated: 13 November 2014