The cost of student life - the big picture
Finances are an important factor in deciding what to study. This section helps you understand the full cost of your study and all the options you have. The key is to only borrow what you need and keep your debt to a minimum.
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It's important to think carefully about how you finance your study as it could affect your life, income and future options. It's best to:
- check your entitlement to find out what you can get
- borrow only what you need
- keep your debt to a minimum
- pay back debt as soon as you can.
How much will your course cost?
Course costs fall into two categories:
- Course fees: the cost of tuition. This will vary depending on your education provider and what you enrol in.
- Course-related costs: costs related to your study such as textbooks, stationery, and equipment.
How much will you need to live on?
Examples of living expenses are:
- internet access
You may be able to get a Student Allowance to help with your weekly living expenses. If you're not eligible for a Student Allowance, you may be able to borrow up to $173.56 per week for living costs as part of the Student Loan - remember you have to pay this back. Make sure you check to see if you're eligible for a Student Allowance first, as you don't have to repay this.
A recent study estimated that students living away from home can expect to pay between $14,000 - $17,000 per year in a student flat or hostel. There is an example of weekly student living expenses below.
Getting a Student Loan to help with your studies? How much should you borrow?
Before deciding to take out a Student Loan, look into all the ways you can finance your study. Deciding whether to borrow, and how much, depends on many factors, including:
- whether you can get a scholarship or grant
- whether you will work while you study
- cost of your accommodation
- whether you're entitled to other financial assistance.
The Inland Revenue Student Loan Repayment Calculator shows you what your Student Loan repayments could be, and how long repayment could take.
Repaying a Student Loan
If you decide to take out a Student Loan, it's important to understand what's involved in paying back a loan, and how and when to start paying it back.
After your course finishes your loan account will be transferred from StudyLink to Inland Revenue. Once you earn over $19,084 per year you are required to start paying off your Student Loan even if you're still studying.
Your employer will deduct the Student Loan repayment from your pay if you are earning over the pay period repayment threshold. But it's best to make additional payments if you're able to, to pay off your loan faster.
Remember, the less you borrow, the faster you'll pay off your loan. Take a look at these examples:
|Tama's Student Loan is $29,000 and he currently earns $35,000 a year. He makes the minimum repayments each week. It will take him a little over 15 years to pay off his loan.|
|However, Kim's loan is $14,000 because she worked part-time while she studied. Paying the minimum amount each week, her loan will be paid back in under 7 years.|
|Better still, Jeremy has a loan of $15,000. He pays $30 a week more than the minimum amount. He'll pay off his loan approximately 3 years earlier.|
The Inland Revenue website has a calculator to show you how long it could take to pay off a Student Loan, as well as information about loan repayments and interest.
Funding your study without a Student Loan
A Student Loan may not be your only option. Have you thought of other ways to help fund your study?
- Is there a scholarship or grant you could get?
- Can you save money towards the cost of education before starting to study?
BreakOut is a searchable database of New Zealand scholarships, awards and grants. You can visit the BreakOut section of the Funding Information Service website for a list of places where you can use these services for free or ask your local library if they offer the service.
Have you thought of all the ways to meet your living expenses while studying?
- Can you get a Student Allowance? Check out What you can get online.
- Have you checked out what extra help you may be eligible for? Check out What you can get online.
- Have you thought about working part-time while you study?
- Could you live with a parent or caregiver?