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$30 Million Interest Written Off Student Loans

27 May 2001

Around 60,000 student loan borrowers will receive statements over the next seven days detailing their share of a $30 million student loan interest write-off, Associate Education (Tertiary Education) Minister Steve Maharey said today.

The letters from Inland Revenue confirm the first interest write-offs to occur under the 'no-interest-while-studying' policy introduced by the Labour-Alliance Government.

These are the first interest write-offs to occur this year and will apply to students who studied full-time last year. Part-time low-income students (those earning under $24,596 for the year to 31 March 2001) are also eligible and will receive their write-offs in June. Over the course of this week Inland Revenue expects to advise 60,000 students who studied full-time last year that they have saved up to $30 million in interest charges. For a borrower with the average student loan of $12,883 this will mean a write-off of approximately $900 in interest charges which would otherwise have been added to their loan. Actual figures for full-time students will be available in June.

Mr Maharey said the interest write-offs fulfil a key election pledge.

"Student debt got out of control over the 1990s and was a major election issue. The 'no-interest-while-studying' policy stops student debt spiralling out of control.

"Too many students found themselves paying back the interest which accumulated on their loan without ever reducing their loan principal.

"All student loan borrowers will start receiving statements from Inland Revenue on Monday 28 May and the mailing will be completed by Thursday 31 May.

"There is no time limit to apply for an interest write-off if you are eligible. If you haven't provided Inland Revenue with your correct details or you forgot to apply you can do so at any stage in the future simply by contacting the Department. You can also use Inland Revenue’s website to do this at www.ird.govt.nz

"Eligible part-time students will have their interest written off in late June following confirmation by Inland Revenue of their income last year. Approximately 20,000 part-time students have applied for an interest write-off to date," Steve Maharey said.


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