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The following changes to student loans were announced in Budget 2012.
Repayment rate increase
From 1 April 2013 the repayment rate for standard student loan deductions will increase from 10% to 12%.
For employers, the student loan standard deductions that are reported on the Employer monthly schedule (IR 348/EMS) for the period ended 30 April 2013 and all future periods should be using the 12% repayment rate.
Voluntary repayment bonus repealed
The voluntary repayment bonus will be removed from 1 April 2013. Any extra repayments made for student loan obligations between the 2010 to 2013 tax years (1 April 2009 to 31 March 2013) may still qualify for the bonus.
Extra repayments made from 1 April 2013 for obligations for the 2014 tax year onwards will no longer qualify for the bonus. However, these additional repayments will still help you pay off your student loan faster.
Other student loan changes from 1 April 2012
Pay period repayment obligations
If you're earning above the pay period repayment threshold in New Zealand, your student loan deductions every pay period will be considered as meeting your repayment obligation on your salary or wage income, unless there's a significant over- or under-deduction.
This means you won't have a student loan bill or refund after the tax year. However, we'll check your pay details to make sure your deductions are correct.
Repayment exemptions for full-time students
You can apply for a repayment deduction exemption if you're studying full-time in New Zealand and expect to earn less than the annual repayment threshold ($19,084 until the 2015 tax year). Having an exemption means you don't have to use tax codes with "SL" and have student loan deductions from your pay.
Reduced rates for secondary earnings
For borrowers in New Zealand with more than one job, you can apply for a student loan special deduction rate for your secondary earnings if you earn less than the pay period repayment threshold from your main job. This ensures you're making just the right repayments toward your student loan.
One-year repayment holiday
If you're going overseas, you can apply for a repayment holiday so you can take a break from making repayments for up to a year while you're away. You need to:
- apply for the repayment holiday, either:
- before you leave New Zealand, or
- within the first 183 days of being overseas, and
- provide an alternative contact person based in New Zealand.
Annual administration fee
An annual administration fee of $40 will be charged to your account if you have a student loan balance of $20 or more, unless you have been charged StudyLink's establishment fee in the same year.