Student Loan Interest Changes Explained
STUDENT LOAN INTEREST CHANGES EXPLAINED
The Government recently announced that full-time and low income students will pay no interest on their student loans while they are studying in 2000 and beyond. This policy will be implemented through interest write-offs by Inland Revenue.
To be eligible for the interest write-off, students must be studying full-time full-year (i.e. for a minimum of 32 weeks) or studying and earning less than $14,768.
Interest will still be calculated for loans taken out in 2000 and will be shown on statements and contracts issued by WINZ. However, students will then be able to have the interest written off by Inland Revenue in 2001 provided they meet the eligibility criteria.
For students who took out a loan for 1999 or earlier, any interest charged on their loan balance from 1 April 2000 will also be written off provided the student is studying in 2000 and meets the eligibility criteria.
Where student association fees are compulsory, the fees can be borrowed as part of the compulsory fees loan entitlement. Where student association fees are voluntary, the fees can still be claimed under the course costs entitlement.
Work and Income New Zealand's Student Services are sending information to all students applying for a loan for 2000 as well as previous borrowers who still have outstanding loans, explaining how the changes will affect them.