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.
Find out more about Budget 2012 on the Beehive website
Find out more about changes on the Ministry of Education website

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.