[1] StudyLink is the public organisation part of the Ministry for Social Development and is responsible for administering student loans and allowances.
Repayment of student loans is required as soon as the income threshold of $22,828 (2024 tax year) is reached, this applies even if the borrower is still studying.
Repayments are managed by the Inland Revenue Department (IRD), and information about the borrower's loans can be accessed through their myIR account.
[3] The loan repayment rate is 12% of every dollar over the income threshold, re-calculated at the start of the tax year.
[5] There are exceptions to the residency criteria: where the student is a refugee or protected person or their immediate family, an Afghan evacuee, or a Christchurch Response Visa.
This applies to all new student loan applications received by StudyLink on or after 7 February 2013 and includes all unpaid repayment obligations, late payment interest, penalties, and amounts under installment arrangement.
[20] While student loans remain interest-free for as long as the borrower is living in New Zealand if repayments are not made on time, late payment interest can be charged on the overdue amount at 6.8%.
[21] If a borrower is having difficulties meeting the repayment requirements, the IRD may offer repayment options,[22] as well as offering a reduced late payment interest rate, if the borrower contacts the IRD about the late payments, at a rate of 4.9%.
[27] The two main agencies responsible for the maintenance and functioning of the student loan system are the Inland Revenue (IRD) and the Ministry of Social Development.
After the inception of interest-free student loans by the 5th Labour government led by Helen Clark it was not until 2009 that the entity Study Link was formed as a consolidated platform for education providers and students to manage loans which is an entity of the Ministry of Social Development.
[30] In the Act there are more symbolically binding responsibilities of the Crown, but the main authorities outlined are the commissioner and loan manager.
Still, different parties have different degrees of support for subsidizing tertiary education, with the 2017 Labour govt introducing first year free fees.
The Act party in 2016 promoted policies that added interest back to student loans, which they removed in 2020.
Another important thing to note is a minimum $15,000 fine for a person deemed to have committed an offense about avoiding or misrepresenting their loan repayment deductions to people such as employers, PAYE tax intermediaries, and more.
[39] In 2001 a growing debt mountain caused the Fifth Labour Government to stop interest payments while students studied.
The University Students Association criticized the changes, saying people choosing to pay back loans quickly would no longer be rewarded, and repayment thresholds were too low, at about 34% below the median weekly income.
It was an effort to recover $430 million of defaulted student loan debt, "80 per cent of which is owed by overseas borrowers".
The move was criticized by NZUSA, which said the policy would be ineffectual, and could potentially create "student loan refugees".
The total amount of student loan debt in New Zealand has increased from 934 million [52] in 2002 to 16 billion[53] in 2021.
However, these numbers can be dependent on the course of study a student is taking and the length of time spent having to complete their degree.
[64] A similar report by the University of Canterbury estimated that the weekly costs of a flatting student were $348.
The Inquiry recommended adjusting student allowance payments to match the cost of living.
[67] To account for the high levels of inflation, the Ministry of Social Development increased the living costs payment to $302.32 from $281.96 on 1 April 2023.