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