Interest-free student loans - eligibility and what you need to do
What you need to know
- Eligibility requirements
- Information matching with New Zealand Customs Service
- If you live in New Zealand
- If you go overseas
- If you return from overseas
Eligibility requirements
183-day requirement
Student loans for borrowers living in New Zealand for 183 or more consecutive days (about 6 months) are interest-free. This is called the 183-day requirement and applies if you:
- already have a student loan or are getting one, and
- whether or not you're currently studying.
Note
If you’re eligible, interest will be charged and then written off on a daily basis. Interest and interest-free write-offs will appear on your statement.
Living in New Zealand
If you’ve met the 183-day requirement, you'll continue to be eligible for an interest-free student loan, until you go overseas for 184 or more consecutive days.
If you've returned to New Zealand from overseas and haven't yet met the 183-day requirement, you can go overseas for up to 31 days in total and still be eligible for an interest-free student loan. Once you've met the 183-day requirement, interest will automatically be written off from the first day of your qualifying period.
Living overseas - if you don't meet the 183-day requirement
You won't be eligible for an interest-free student loan until you return to New Zealand for 183 or more consecutive days. Let us know the date you come back so we can calculate how much interest will be written off. Once you've been back for 183 days, you'll be eligible for a write-off of the interest charged from the date of your return.
Note
You may be eligible for an exemption from having to meet the 183-day requirement. See "Find out more" below, for details.
Example - interest-free student loan from the day you return
Daniel's been living in England for the last two years. On 1 June 2009 he returns to New Zealand to live and contacts us to let us know. Daniel meets the 183-day requirement on 30 November 2009 and is eligible to have all interest charged from (and including) 1 June 2009 written off.
| Daniel's interest charges for the tax year to 31 March 2010 | $2,760 |
| minus interest-free student loan write-off (from 1 June 2009 to 31 March 2010) | -$2,298 |
| Interest remaining for the year ending 31 March 2010 | $462 |
Daniel will have $462 of interest remaining on his loan balance (for the period 1 April 2009 to 31 May 2009) as he isn't eligible for an interest-free student loan write-off for the time he was living overseas.
Information matching with New Zealand Customs Service
To help us determine whether a student loan borrower is eligible for an interest-free student loan, we carry out an information matching programme with the New Zealand Customs Service (Customs).
Inland Revenue and Customs have met the conditions of an information matching programme under the Privacy Act 1993 and have the approval of the Office of the Privacy Commissioner.
However, if you're going overseas for more than six months, you're still legally required to let us know you'll be out of the country.
You have the right to challenge the information you receive from us as a result of the information matching programme. To do this, either send us a secure email through the Send and receive mail service (under "Get it done online") or call us on 0800 77 778.
What you need to do if you live in New Zealand
Once you've met the 183-day requirement, you don't need to do anything. Interest, including any interest charged by StudyLink, will be written off automatically.
What happens if you go overseas
Who this applies to
This applies if you're going overseas, and have already lived in New Zealand for 183 or more consecutive days (about 6 months).
How long can I go overseas for?
You can travel overseas for up to 183 days and still be eligible for an interest-free student loan. When you return, you must remain living in New Zealand for 32 or more days, to keep your entitlement to an interest-free student loan.
What if I leave for 184 or more days?
You'll no longer be eligible for an interest-free student loan. Any interest charged from the day after you leave New Zealand won't be written off. You'll only get a write-off for interest charged up to, and including, the day you leave (see "Find out more" below, for exemptions to this rule).
What do I need to do?
If you're going overseas for more than six months, you need to let us know. See "Find out more" below, for details about what you need to do before you go, and whether you're eligible for an exemption from the 183-day requirement while you're away.
Example - interest-free student loan for travel overseas of less than 184 days
Amelia's lived in New Zealand all her life (183-day requirement has been met). On 1 November 2008 Amelia travels around Asia for 4 months and returns to New Zealand on 28 February 2009. She's been away for less than 184 days and is eligible to have all her interest charged for the 2009 tax year (1 April 2008 to 31 March 2009) written off, including the time she was overseas.
| Amelia's interest charges for the year to 31 March 2009 |
$1,725 |
| minus interest-free student loan write-off |
-$1,725 |
| Interest remaining for the year ending 31 March 2009 |
$0 |
What happens if you return from overseas
Who this applies to
This applies if you've been living overseas and have recently returned to New Zealand, but haven't lived here for 183 or more consecutive days yet.
How long can I go overseas for?
From the day you first return to New Zealand, you can travel overseas for up to 31 days in total without breaching the 183-day requirement.
What if I leave for 32 or more days?
You'll break the 183-day requirement. A new 183-day qualifying period will start from the day you arrive back in New Zealand.
Part days in New Zealand
Any part-days in New Zealand are counted as a full day. For example, the day you arrive and the day you leave are counted as full days in New Zealand.
What do I need to do?
If you're returning from living overseas you need to let us know when you get back. Either send us a secure email through the Send and receive mail service (under "Get it done online"), or call us on 0800 377 778.
Example - interest-free student loan for travel up to 31 days
Sarah's been living in Australia for two years and returns to New Zealand on 1 May 2008. She lives and works in New Zealand for the next five months but decides to go back to Australia for a three week holiday, leaving New Zealand on 1 October 2008. Sarah hasn't met the 183-day requirement by the time she leaves for her holiday (154 days), but because she's away for less than 32 days, she'll still be eligible for an interest-free loan from (and including) 1 May 2008. Interest charged before 1 May 2008 won't be written off.
| Sarah's interest charges for the year to 31 March 2009 |
$1,380 |
| minus interest free student loan write-off |
-$1,267 |
| Interest remaining for the year ending 31 March 2009 |
$113 |
Sarah will have $113 of interest remaining on her loan balance (for the period 1 April 2008 to 30 April 2008) as she isn't entitled to have an interest-free student loan write-off for the time she was living overseas.
Find out more
Next steps
Date published: 14 May 2009
Back to top
