How a student loan works

What is a Student Loan?

It's a loan from the Government to help with your study costs. To get a Student Loan you need to sign a legal contract with the Government, and you need to take out a new loan with each new study year.

Do I need to prove that I can pay back the loan?

No. You don't have to provide any security or guarantee for the loan, because the Government is providing the loan and will recover the money from you through Inland Revenue directly.

However, if you're under 18, you need to get your parent's consent.

How much can I borrow?

There are 3 parts to a student loan plus a $50 administration fee for each loan account you use. You don't have to borrow for all three purposes.

1. Course fees . Pays the entire amount of your tuition fees (including Student Association fees) for study at a university or tech. There's a limit of $6,500 for private training establishments. Fees are paid directly to your institution by StudyLink.
2. Course-related costs. Up to $1,000 a year for things like stationery, textbooks, childcare, travel or computer equipment. The money is put directly into your account as a lump sum.
3. Living costs. You can borrow up to $150 a week for living expenses while you study but this goes down by the amount of Student Allowance you receive after tax. This is direct credited to your account each week.

Loan vs Allowance
What you borrow for living costs goes down by your Student Allowance.

Student Allowance after tax + Student loan living costs = $150.

For example, if your Student Allowance is $100 a week after tax, then you can only borrow up to $50 a week for your living costs.

Note that your Student Allowance is not a loan, you don't have to pay it back. 

When do I start paying back the loan?

Once you earn over a certain amount a year (the 'repayment threshold' currently set at $18,148 before tax), you must start paying back your student loan, even if you're still studying.