Student loan changes from 1 April

Changes to the student loans scheme this year mainly affect overseas borrowers, who will now pay less, or in some cases no, interest on their loans.

From 1 April 2010, the student loan interest rate (for borrowers who go overseas for 184 or more consecutive days) will reduce, from 6.8% to 6.6%.

However recent legislation means there are now more situations where you could get an interest-free loan while you are overseas. The government has extended the list of interest exemptions to include borrowers who are:

• in Niue, Cook Islands, Tokelau or Ross Dependency
• studying as part of a formal exchange programme, or
• studying at post-graduate level because their course isn't offered by a New Zealand tertiary education provider.

Visit the Inland Revenue website to find out if you are eligible for an interest-free student loan while you are overseas.

For New Zealand-based borrowers (who pay no interest on their student loan), there’s no change this year to the repayment threshold (the amount you are allowed to earn before you have to start paying back your loan) – it stays at $19,084.