Student Loan Scheme Annual Report 2003

Publication Details

The Student Loan Scheme Annual Report for the financial year ending 30 June 2003, incorporating the financial report to 30 June 2003. This report contains financial and demographic information on the Student Loan Scheme, including information on student loan borrowing and debt up to 30 June 2003. In addition to the information presented in previous years, this year's report contains new and additional information including:

  • more detailed contextual information on the role of the loan scheme in the tertiary system;
  • the fair valuation of the scheme;
  • more detailed information on modelling assumptions; and
  • information from the new integrated Student Loan dataset.

Author(s): Ministry of Education, Inland Revenue, and Ministry of Social Development.

Date Published: September 2003

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Executive Summary

New Zealand’s future depends on a high performing tertiary education sector producing graduates with knowledge and skills that not only improve their own lives but also the lives of individuals in their communities, and that also advance the country’s prosperity and its place in the world.

Participation in tertiary education in New Zealand has increased significantly since the late 1980s. Total government spending on tertiary education has also grown significantly. Spending on tuition subsidies alone has increased by more than 50 percent since the 1999/2000 fiscal year. The government’s spending on tertiary education is expected to reach 1.6 percent of the country’s Gross Domestic Product in the 2002/03 fiscal year, up from 1.3 percent in 1999/2000.

The main mechanisms that the government uses to provide financial assistance to students participating in tertiary education are tuition subsidies, student allowances and student loans. The objective of the Student Loan Scheme is to make tertiary education more accessible to all New Zealanders by providing financial support for those studying.

The 2003 Student Loan Scheme Annual Report provides a consolidated view of the Student Loan Scheme for the 12 months ended 30 June 2003. It includes information about student borrowing in 2002/03 and in the preceding years, and brings together information about student loans from the three government agencies responsible for the management of different aspects of the scheme:

  • the Ministry of Education, responsible for strategic policy;
  • the Ministry of Social Development, through StudyLink, responsible for the delivery of loans to students; and
  • Inland Revenue, responsible for collecting student loan repayments through the tax system and facilitating interest write-offs for eligible borrowers.


This report also describes the ongoing work being undertaken to improve reporting on the impact of student loans, as recommended in the Auditor-General’s June 2000 review of the availability of information on the scheme and in the follow-up report of 2003.

The integration of data from the three agencies involved, under the management of Statistics New Zealand, is designed to provide a better understanding of the outcome of having a student loan for the borrower. The first report on the integrated dataset was completed in December 2002. An analysis of repayment rates, drawn from the integrated dataset, is included in this report.

Highlights from the report include:

  • The average amount borrowed in an academic year has increased from $3,628 in 1992 to $6,135 in 2001 and $6,204 in 2002.
  • In the 2002 academic year, 150,575 students borrowed $934 million through the Student Loan Scheme.
  • 52 percent of all borrowers had a loan balance under $10,000.
  • 5 percent of all borrowers had a loan balance greater than $40,000.
  • Since the commencement of the scheme, $1,870 million in interest and principal repayments has been collected.
  • As at 30 June 2003, 128,688 borrowers had repaid their loans in full since the scheme began in 1992. 21,770 loans were repaid in 2002/03.
  • The level of overdue loan repayments as at 30 June 2003 was $101 million, of which 43.5 percent ($44 million) was under instalment arrangement for payment.
  • The average cumulative student loan debt owing to the government and administered by Inland Revenue has increased from $5,525 in 1993/94 to $12,643 in 2001/02 and $13,680 in 2002/03.
  • There were 390,027 people with outstanding loan balances held by Inland Revenue at 30 June 2003.
  • The total outstanding debt held by both Inland Revenue and the Ministry of Social Development through
    StudyLink at 30 June 2003 was $5,370 million.
  • The Student Loan Scheme has a provision for doubtful debts, currently calculated at 11.4 percent of the value of the outstanding debt. At 30 June 2003, the doubtful debt provision was $724 million.
  • The total value of interest write-offs recorded in the year to 30 June 2003 was $198 million.
  • The forecast overall average loan repayment time is estimated at 9.5 years compared with a forecast time in June 2002 of 10.3 years.

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