Student Loan Info - 2008

Student Loan Info Issue April 2008

• Use the right tax code if you're a salary or wage earner
• New dates for interim repayments
• 2009 repayment threshold and interest rate
• Debit cards offer new payment option
• Repayment holiday for overseas-based borrowers

Use the right tax code if you're a salary or wage earner

If you're based in New Zealand and you're a salary or wage earner, you're required to tell your employer you have a student loan and use the correct tax code. If you're going to be earning more than $18,148 from your main job in the year to 31 March 2009, you need to use the M SL tax code for that job. If you have other jobs, you will need to use a secondary tax code for them. If you're not doing this already, you should advise your employer/s straightaway and complete a Tax code declaration (IR330) form.

See student loans for more details.

New dates for interim repayments

Do you make interim repayments towards your student loan? Due dates for interim repayments have changed from 1 April 2008. The 2009 interim repayments are the first to be affected. If you have the standard 31 March balance date, your 2009 instalments are due by:

1. 28 August 2008
2. 15 January 2009
3. 7 May 2009.

This change brings student loan interim repayments in line with the new due dates for provisional tax.

2009 repayment threshold and interest rate

The student loan repayment threshold for the 2009 tax year is $18,148.

If your annual income is over this threshold you must make repayments towards your student loan. This applies whether you earn salary or wages, or are self-employed.

The interest rate for the 2009 tax year is 6.7% (for borrowers who are not eligible for an interest-free student loan).

Remember, it's always a good idea to make additional repayments towards your student loan. The more you repay towards your student loan, the faster you can pay it off. You can make additional repayments whether you earn under or over the repayment threshold.

Debit cards offer new payment option

Borrowers can now use certain debit cards to make payments towards their student loan.

Visa and MasterCard debit cards are relatively new to New Zealand but are common in a number of global regions, including Australia and the United Kingdom, and are like a cross between a credit card and an ATM card. When you use your Visa and MasterCard debit card, the money comes out of your current (cheque) account.

Debit cards may be a convenient choice for people who don't use a credit card.

How do you use debit cards to pay off your student loan? You'll find the instructions under "Get it done online", "Student loans".

Please note that we can only accept Visa and MasterCard debit cards.

Repayment holiday for overseas-based borrowers

If you're an overseas-based borrower you may be entitled to a repayment holiday of up to three years. This means that while you're on the repayment holiday you don't have to make any compulsory repayments towards your student loan. However, interest will continue to be charged on your student loan - so it's a good idea to make additional payments to help keep on top of your loan.

• If you're thinking of going overseas, or you're already overseas and left New Zealand after 1 April 2007, you're automatically entitled to a three-year repayment holiday.
• If you were already overseas on 1 April 2007 and have kept up-to-date with your repayment obligations, or you had been overseas for less than one year, you're automatically entitled to a three-year repayment holiday. This repayment holiday will have started from 1 April 2007 and you don't need to do anything to receive it.
• For all other borrowers who were overseas as at 1 April 2007, your entitlement depends on the length of time you've been overseas and if you have kept up to date with your repayment obligations.

To find out more about the repayment holiday, see student loans.

Go to student loans for more information about your student loan and interest-free student loans.

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Date published: 19 Jun 2008

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