Annual Report 2006: Part two - Delivering on our outcomes
Student loans
Inland Revenue's role in administering the student loan scheme is to collect repayments from student loan borrowers. This year we received $499.2 million in loan repayments, compared to $510.3 million last year. During this year, the total loan borrowings increased from $6.7 billion to $7.4 billion. 16,287 borrowers finished repaying their loan this year, compared to 21,079 last year10.
As at 30 June 2006:
- there were 470,507 student loan borrowers, compared to 445,074 last year. 94.1% of borrowers are resident in New Zealand and 5.9% have non-resident status
- the median value of a student loan was $10,652, compared to $10,404 last year.
Figure 15
Total student loan balance and total amount repaid
Changes to the student loan scheme
The government made major changes to the scheme at the end of 2005. These changes removed interest payments for most borrowers and created an amnesty for non-resident borrowers11. The main conditions of the changes are:
- Interest-free student loans - from 1 April 2006, student loans for borrowers living in New Zealand for 183 or more consecutive days became interest free. For those who are eligible, interest will be written off automatically after the end of each tax year. The first interest write-offs will be in April 2007.
- Non-resident amnesty - borrowers who qualify for the amnesty will have late payment penalties written off up to the date we receive their application. The amnesty period runs from 1 April 2006 to 31 March 2007 and applies to borrowers who meet specific qualification requirements.
For more detailed information see the Student Loan Scheme Annual Report 2006, a joint publication of the Ministry of Social Development, the Ministry of Education and Inland Revenue. This can be found at:
http://educationcounts.edcentre.govt.nz/publications
10. As at the end of each year. Student loan accounts can be finalised after the end of the fiscal year, so the number of loans repaid each year will increase after 30 June. The number of loans repaid for 2004-05 was 21,079 as at 30 June 2005 and 24,605 as at 30 June 2006.
11. The amnesty aims to: remove one of the barriers to borrowers wanting to return to New Zealand; encourage borrowers into making regular loan repayments; and help borrowers with overdue repayments manage their loans better.
Date published: 06 Nov 2006
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