Student Loan Scheme changes
Changes to student loans make it easier for you to manage and repay your student loan, whether you’re in New Zealand or overseas.
The majority of changes took effect from 1 April 2012, with additional changes being introduced in April 2013.
- Adding "SL" to your tax code
- Repayment exemptions for full-time students
- Reduced rates for secondary earnings
- View all your loan information on one site
- Pay period repayment obligations
- Extra repayments through salary or wages
- Annual administration fee
- Changes to late payment penalties
- Recalling the entire loan amount
- Shorter repayment holiday
- Excluding losses
- Alternative contact person for new student loan applications
- Other changes announced in Budget 2011
- Pay period threshold for student loan deductions for 2013 tax year
Adding “SL” to your tax code
If you're in New Zealand and earn salary or wages, you need to add "SL" to your tax code regardless of how much you earn, unless you have an exemption. This will ensure you're making the right repayments toward your student loan through your pay.
Find out more about student loan repayment tax codes and your obligations
Repayment exemptions for full-time students
You can apply for a repayment deduction exemption if you're studying full-time and expect to earn less than the annual repayment threshold ($19,084 for the 2013 tax year). You can apply for this exemption through your online services account.
Find out more about the repayment deduction exemptions
Reduced rates for secondary earnings
For borrowers 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. You can apply for a reduced rate through your online services account.
Find out more about the special deduction rate
View all your loan information on one site
If you're currently studying, you're now able to see a complete and up-to-date view of your loan balance including StudyLink transactions through your Inland Revenue online services account - you need to be registered for this service.
Register for secure online services.
StudyLink will be transferring loan account information to us on a daily basis. This means the statements you'll receive from us will also include your StudyLink transactions so whether it's online or on paper, you will see your total loan balance every time.
Pay period repayment obligations
If you're earning above the pay period repayment threshold in New Zealand, your student loan deductions every pay period from 1 April 2012 will be considered your repayment obligation, unless there's a significant over- or under-deduction. Your repayment deductions are generally considered final. However, we'll check your pay details to make sure your deductions are correct.
- If there's a significant under-deduction, we can require you to have catch-up deductions made through your employer to recover the amount.
- For significant over-deductions, you can either request a refund or have this applied to your loan balance so you may be eligible for a 10% voluntary repayment bonus.
If you have income from other sources such as interest, dividends, rental or business income, you may still be required to have an annual end-of-year assessment.
Find out more about repayment obligations, and
Find out about significant over and under-deductions
Extra repayments through salary or wages
You can ask your employer to make extra student loan repayments through your salary or wages. Just let them know how much extra you want to pay and your employer will send us your extra repayments along with your standard student loan deductions each month.
Find out about making extra repayments
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.
Changes to late payment penalties
The late payment penalty is now called late payment interest and has been reduced from 1.5% to .843% monthly.
Find out more about late payment interest
Recalling the entire loan amount
For borrowers who have consistently been non-compliant with their repayment obligation, we now have the power to demand full repayment of a student loan, whether or not the entire amount is outstanding.
Shorter repayment holiday
If you go overseas on or after 1 April 2012, you can apply for a repayment holiday for up to the first year (365 days) of being overseas. You need to apply for the repayment holiday either before you leave New Zealand or within the first 183 days of being overseas, and to provide an alternative contact person based in New Zealand.
Find out more about the repayment holiday
Excluding losses from calculating repayment obligation
From 1 April 2012, you won’t be able to use losses from your business or investment activities to offset your income and reduce your student loan repayment obligation.
Alternative contact person for new student loan applications
Borrowers need to provide an alternative contact person for all new student loan applications for study starting from 1 January 2013.
Other changes announced in Budget 2011
Government has also announced further changes to student loans in Budget 2011.
- From 7 February 2013, borrowers won't be able to borrow through the Student Loan Scheme if they have $500 or more in default at the time of their application, and that at least some portion of that amount has been overdue for a year or more. This applies to all new student loan applications received on or after 7 February 2013 and includes all unpaid repayment obligations, late payment interest, penalties and amounts under instalment arrangement.
- The repayment threshold will remain at $19,084 until 31 March 2015.
Pay period threshold for student loan deductions for 2013 tax year
| If your pay period is ... | the repayment threshold is ... |
|---|---|
| weekly | $367 |
| fortnightly | $734 |
| 4-weekly | $1,468 |
| monthly | $1,590 |
Back to Guide to student loans
Date published: 09 May 2012
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