Summary

This report, Income of Student Loan Scheme Borrowers, analyses the incomes of those who used the Student Loan Scheme between 1997 and 2000. It looks at the income of people while they are studying, their income in their first year out of study and, for those who last borrowed and studied in 1997, their income three years after they left study. It also looks at how incomes change over time and it examines the composition of borrower's post-study income - including the incidence of social welfare benefits. The report also analyses patterns of residence overseas by borrowers.

This report has been published in conjunction with a second report called "Living with a Student Loan, a profile of student loan debt and repayment, post-study income and going overseas". That report analyses the post-study incomes, progress to repayment, and travel overseas of two cohorts of borrowers: those who last borrowed and studied in 1997, and those who last borrowed in 1994. It also includes a cross-sectional analysis of all people with a student loan at 31 March 2001, including leaving debt by qualification level for those that graduate and those that don't.

These reports represent the first in-depth analytical reports using data from Statistics New Zealand's Integrated Dataset on Student Loan Scheme Borrowers. This dataset was first developed in 2002, in part, in response to criticisms of the lack of research available on the socio-economic and financial impacts of the Student Loan Scheme. The dataset combines data from Ministry of Education, Ministry of Social Development and Inland Revenue and provides rich new opportunities to analyse what happens to student loan scheme borrowers over time, during and after study.

Key Findings

Some of key findings from Income of Student Loan Scheme Borrowers:

• The level of qualification studied and whether it was successfully completed or not make a large difference to a person's income after study.
• For borrowers who successfully completed a bachelors degree, there is minimal difference in starting salaries between ethnic groups. For borrowers who did not complete, the differences in starting salaries between ethnic groups are quite marked.
• While most people's earned income rises in the first few years after study, there is a large proportion who receive state benefit in the first few years following study. The likelihood of receiving a benefit is strongly correlated with level of study, completion status, gender and field of study.
• Women earn more than men while studying, but less than men after study. Completing a tertiary qualification tends to reduce the gap in income of men and women.