Loans description
Student loans are loans offered to
students to assist in payment of the costs of
professional education. These loans usually carry lower
interests than other loans, and are usually issued by
the government. Often they are supplemented by student
grants which do not have to be repaid.
The New Zealand state provided student loans and
allowances are available to tertiary students who
satisfy the funding criteria. Full-time students can
claim loans for both fees and living costs while
part-time students can only claim training institution
fees. A non-refundable means-tested student allowance
for living expenses can be claimed by students who are
over 25 years old or whose parents have a low income.
Loans are repaid by a 10% tax surcharge on income, once
the student graduates and is in employment. There is a
minimum income level, roughly equivalent to the
unemployment welfare benefit payment rate, that is
exempt from assessment and an interest rebate that can
be claimed for low income and while the student is
studying full-time. Loan recipients who leave New
Zealand are assessed on their world-wide income for
repayment purposes, with a minimum annual payment being
required.
In recent years, large student loan debts have meant
that many recent graduates have sought higher paying
overseas work in preference to remaining in New Zealand.
This has led to skill shortages in some professions as
local employers have been unwilling or unable to match
international salaries. Medical-related professions have
been particularly hard hit due to recent graduates,
having high loan debts and health employers, having
tightly controlled government funding.
In the 2005 general election one of the election
policies from the Labour Party was:
During our next term in govt, we will abolish all
interest charges on student loans for all students and
NZ based graduates from 1 April 2006. |
