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Student loan write-offs top $240 million

25 September 2003 Media Statement

Student loan write-offs top $240 million

Student loan borrowers have saved more than $240 million in interest charges in the three years of the government’s no-interest-while-studying policy – including $109.5 million that would have been added to student loans this year.

All full-time and part-time low-income (those earning ($25,378 and less) students qualify for a full interest write-off while they are studying. In the current year 109,149 students received a write-off, saving on average $1,003.

Associate Education (Tertiary Education) Minister Steve Maharey said the no-interest-while-studying policy stops student debt spiralling out of control.

“During the 1990s too many students found themselves paying back the interest which accumulated on their loan without ever reducing their loan principal.

“The no-interest-while-studying write-offs ensure that students using the loans scheme graduate owing only what they have borrowed.

“The value of the write-offs has climbed in each of the three years they have been made and will have shaved around an average $2,800 off the loan of a student completing a three year degree this year. It is estimated that these write-offs mean that many graduates are repaying their loans a year and a half earlier than would otherwise have been the case. The average student loan repayment time is 9.5 years.

“There is no time limit to apply for an interest write-off if you are eligible. Those students who have not yet provided Inland Revenue with correct details or who have forgotten to apply 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,” Steve Maharey said.

ENDS

Attached is a table showing approximated write-offs by tertiary institution.

Approximated Student Loan interest savings by institution Estimated Write-off

Source: MoE Sept 2003
[$m Est.]
Auckland UNIVERSITY OF AUCKLAND 11.6
AUCKLAND UNIVERSITY OF TECHNOLOGY 5.0
UNITEC INSTITUTE OF TECHNOLOGY 3.2
MANUKAU INSTITUTE OF TECHNOLOGY 2.4
AUCKLAND COLLEGE OF EDUCATION 1.2
Auckland institutions subtotal $23.4
Hamilton UNIVERSITY OF WAIKATO 5.4
WAIKATO INSTITUTE OF TECHNOLOGY 2.6
Hamilton institutions subtotal $8.0
Palmerston North MASSEY UNIVERSITY 9.6
UNIVERSAL COLLEGE OF LEARNING 2.2
Palmerston North institutions subtotal
(overestimate - includes Massey and UCOL regional campuses) $11.9*
Wellington VICTORIA UNIVERSITY OF WELLINGTON 6.4
WELLINGTON INSTITUTE OF TECHNOLOGY 1.3
WHITIREIA COMMUNITY POLYTECHNIC 1.2
WELLINGTON COLLEGE OF EDUCATION 0.4
Wellington institutions subtotal
(underestimate due to absence of Massey Wellington figures) $9.3*
Christchurch UNIVERSITY OF CANTERBURY 5.6
CHRISTCHURCH POLYTECHNIC INST OF TECH 2.4
CHRISTCHURCH COLLEGE OF EDUCATION 1.0
LINCOLN UNIVERSITY 1.0
Christchurch institutions subtotal $9.9
Dunedin UNIVERSITY OF OTAGO 10.4
OTAGO POLYTECHNIC 1.9
DUNEDIN COLLEGE OF EDUCATION 0.6
Dunedin institutions subtotal $12.9
Other Institutions NELSON MARLBOROUGH INST OF TECHNOLOGY 2.5
TE WANANGA O RAUKAWA 1.3
OPEN POLYTECHNIC OF NEW ZEALAND 1.2
EASTERN INSTITUTE OF TECHNOLOGY 1.2
WAIARIKI INSTITUTE OF TECHNOLOGY 1.2
BAY OF PLENTY POLYTECHNIC 1.1
TE WANANGA O AOTEAROA 1.0
NORTHLAND POLYTECHNIC 0.8
SOUTHERN INSTITUTE OF TECHNOLOGY 0.7
WESTERN INSTITUTE OF TECHNOLOGY TARANAKI 0.7
AORAKI POLYTECHNIC 0.4
TAIRAWHITI POLYTECHNIC 0.4
TAI POUTINI POLYTECHNIC 0.3
TE WHARE WANANGA O AWANUIARANGI 0.2
TELFORD RURAL POLYTECHNIC 0.0
Private Training Establishments Overall $20.9
All Tertiary Education Providers $109.5m

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