Student Loan Scheme Annual Report 2008

Publication Details

The Annual Report for 2008 provides information on the scheme and those who borrowed from it in 2007, as well as the financial schedules for the fiscal year to 30 June 2008.

Key findings in the report are:

  • The nominal value of loan balances was $9.573 billion as at 30 June 2008
  • 174,000 students borrowed from the loan scheme in 2007 (66% of eligible students)
  • As at 30 June 2008 530,000 people had a student loan with Inland Revenue for collection
  • The median repayment time for those who left study in 2005 is forecast to be 7 years.

Author(s): Ministry of Education

Date Published: October 2008

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Highlights

Student Loan Scheme Portfolio

As at 30 June 2008:

  • The fair value of the loan scheme was approximately $5,521 million. (Refer to chapter 5.0.)
  • The carrying value of the loan scheme – calculated using International Financial Reporting Standards – was $6,741 million. (Refer to chapter 5.0.)
  • The nominal value of loan balances was $9,573 million. (Refer to chapter 5.0.)
  • 530,000 people had a student loan with Inland Revenue for collection. (Refer to chapter 4.3.)

Since the loan scheme began:

  • 779,000 people have used the loan scheme – 23.3 percent of the population aged 15 and over at 31 December 2007. (Refer to chapter 4.1.)
  • 237,000 loans have been fully repaid. (Refer to chapter 4.4.)
  • Inland Revenue had collected $4,350 million in loan repayments at 30 June 2008. (Refer to chapter 4.4.)

Interest-free student loans:

  • In the first two years of the interest-free student loan policy, borrowers benefited by $976 million in interest. (Refer to chapter 4.4.)

During 2007/08:

  • New repayment provisions were put in place for borrowers overseas. These changes allow these borrowers to take a three-year repayment holiday and simplify the annual compulsory repayment obligation after that holiday. (Refer to chapter 3.3.)
  • The amnesty on penalties for overseas borrowers was also extended by one year. (Refer to chapter 3.3.)
  • Overseas borrowers who are not eligible for a repayment holiday have a new repayment obligation based on the size of their loan balance. (Refer to chapter 3.3.)
  • Students who undertake qualifications that do not receive student component funding are no longer eligible for student loans and allowances. (Refer to chapter 3.3.)
  • The vocational and employment requirements for part-time, part-year students undertaking a course load of between 0.25 and 0.30 equivalent full-time student units were removed. (Refer to chapter 3.3.)

Outcomes of the Student Loan Scheme

  • Research shows that people with tertiary qualifications have lower unemployment, higher incomes and increased wellbeing. (Refer to chapter 2.2.)

From 1994 to 2007:

  • The number of tertiary students (domestic and international) in 2007 was 484,000, compared with 252,000 domestic and international students in 1994. (Refer to chapter 2.2.)
  • The proportion of New Zealanders aged 15 and over at 31 December 2007 who have participated in tertiary education has increased to 13.3 percent – up from 8.9 percent in 1994. (Refer to chapter 2.2.)
  • Enrolments by women in public tertiary education providers have increased by 69 percent. (Refer to chapter 2.2.)
  • Enrolments in public providers by Māori and Pasifika peoples have increased by 166 percent. (Refer to chapter 2.2.)
  • The number of people with a bachelors degree or higher qualification almost doubled – from 224,000 to nearly 448,000. (Refer to chapter 2.2.)

About Students Borrowing from the Student Loan Scheme in 2007

  • 174,000 students (66 percent of eligible students) borrowed from the loan scheme. (Refer to chapter 4.1.)
  • Of these, there were 58,000 new borrowers (based on provisional Ministry of Social Development data), representing 30 percent of all borrowers. (Refer to chapter 4.1.)
  • The total amount borrowed in the year was $1,172.6 million. (Refer to chapter 4.2.)
  • 96 percent of borrowers borrowed to pay course fees; 60 percent borrowed to help meet course-related costs and 50 percent borrowed to meet living costs. (Refer to chapter 4.2.)
  • 25 percent of borrowers borrowed to pay for course fees only. (Refer to chapter 4.2.)
  • 13 percent of borrowers borrowed to pay for living costs and received student allowances as well. (Refer to chapter 4.2.)
  • 32 percent of borrowers were aged 20 or under, 34 percent were 21 to 26 years of age, 29 percent were aged from 27 to 50, and 4.8 percent were over 50 years of age. (Refer to chapter 4.1.)
  • 17 percent of borrowers identified themselves as Māori, 16 percent as Asian and 7 percent as Pasifika peoples. (Refer to chapter 4.1.)
  • The average amount borrowed was $6,747 and the median amount borrowed was $5,868. (Refer to chapter 4.2.) 

About Those Making Repayments in 2007

  • 88 percent were under 45 years of age, 54 percent were aged under 30, and 6 percent were aged over 50. (Refer to chapter 4.3.)

Of Those Who Used the Loan Scheme Between 1997 and 2007 

  • About 56 percent were women. (Refer to chapter 4.3.)
  • 54 percent were European, 23 percent were Māori, 11 percent were Asian and 8 percent were Pasifika peoples. (Refer to chapter 4.3.)
  • 42 percent had studied at a university or college of education, 32 percent at a polytechnic and 22 percent at a private training establishment. (Refer to chapter 4.3.)
  • 52 percent had studied at non-degree level, 41 percent at bachelors level and 8 percent at postgraduate level. (Refer to chapter 4.3.)

As at 30 June 2008:

  • The average loan was $16,966 and the median loan balance was $11,384, including accrued interest. (Refer to chapter 4.4.)

During 2007/08:

  • 15,000 loans were fully repaid. (Refer to chapter 4.4.) 

Valuing and Forecasting the Student Loan Scheme

  • The median repayment time for those who finished study in 1999 was forecast to be nine years. (Refer to chapter 5.4.)
  • The median repayment time for those who finished study in 2005 is expected to be seven years. (Refer to chapter 5.4.)

Over the next four years:

  • The average annual increase in total borrowing is forecast to be 6.6 percent per annum. (Refer to chapter 5.3, Table 19.)
  • The average annual increase in total repayments is forecast to be 10.9 percent per annum. (Refer to chapter 5.3, Table 19.)