Budget 2012 - Changes to Student Loans and Allowances
24 May 2012.
Earlier today the Government announced changes to Student Loans and Student Allowances.
The changes are:
- The Student Allowance will no longer be available for postgraduate study (except Bachelor degrees with honours).
- Exemptions to the 200 week lifetime limit for Student Allowance will be removed.
- The current Student Allowance parental income threshold of $55,027.96 will be maintained without CPI adjustment until 31 March 2016.
- Pilot training students will be limited to borrowing up to $35,000 per EFTS from the compulsory fees component of the Student Loan.
- Student Loan borrowing will be limited to 2 EFTS of study each year.
The following changes were also announced that will affect students when they start repaying their loan:
- From 1 April 2013, the Student Loan repayment rate for all New Zealand-based borrowers earning over the repayment threshold will be increased to 12 cents in the dollar.
- The voluntary repayment bonus will be removed from 1 April 2013.
- 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.
- The definition of income for Student Loan repayment purposes will be broadened to include a wider range of income types from 1 April 2014.
In addition, the following changes from Budget 2011 will be implemented in 2013:
- People aged 55 and over will only be eligible for the compulsory fees component of the Student Loan for study that starts on or after 1 January 2013.
- Students won’t be able to borrow through the Student Loan Scheme if they have $500 or more in default at the time of their application, and that at least some portion of that amount has been overdue for a year or more. This applies to all new Student Loan applications received on or after 7 February 2013.
- All students applying for a new Student Loan for study that starts on or after 1 January 2013 will be required to nominate a New Zealand-based contact person as a condition of accessing the Student Loan Scheme.
