Furthering your education with tertiary study is a no-brainer for
many New Zealanders, and while our course fees are generally affordable
in comparison with the rest of the world, most students will have to
take out a student loan to pay for some or all of their study costs.
Being burdened with a large loan is a huge commitment before you’ve even entered the professional workforce, and trying to understand all the ins and outs of your loan structure can be intimidating – especially if you’re not an accounting major.
Getting to grips with the basics of your student loan will help you make an informed decision when it comes to deciding what courses you’ll take, and how much of your expenses you’ll add to your overall loan total. It might also make you think twice before claiming extra money for ‘course related costs’ so you can spend your first week of orientation spending large at the uni bar.
For further financial information from other parties, there are a number of businesses offering financial advice that you can talk to.
What is a student loan?
Basically, a student loan can help to finance your study. In New Zealand it's made up of three parts: compulsory fees, course-related costs and living costs, and while it may seem like free money if you’re fresh out of high school, you will ultimately have to pay it back.
When you apply for a loan, you choose the parts you want to apply for, depending on what you need and qualify for. Remember that you should only borrow what you need. You’ll be signing a contract with the Government agreeing that you’ll pay back your student loan once you start earning money
Compulsory fees
The compulsory fees part of your student loan allows you to borrow the total amount of fees for your course, including the compulsory Student Association fees that are charged by your education provider.
Whether you already have some money saved for your education, or you’re starting with a blank slate and empty savings account, you can borrow either all or part of your compulsory fees. If you decide to pay part of your fees the amount you've paid will be deducted from the amount you can borrow. That means that if your fees for the year are $6000 and you’ve saved enough to pay $2000 towards them, you will be able to borrow $4000 for compulsory fees for your student loan.
Your compulsory fees are paid directly to your education provider, so you must be fully enrolled in your course for any part of your student loan to be paid.
Course related costs
If you do have genuine course related costs you need assistance with, such as stationery, books, computer equipment, travel, you can borrow up to $1000 a year for course-related costs. You don't have to claim all your costs at once, but you will need to provide evidence of your costs like a quote or receipt.
Course-related costs are paid directly to your bank account, with the earliest payment being 14 days before your course starts. You can apply for your course related costs online.
Living costs
The living costs part of your student loan can help with your weekly expenses if you don't qualify for a Student Allowance or don't qualify for the full amount of the Student Allowance.
You can borrow up to $163.38 each week for living costs while you're studying, but if you’re also working and don’t need to borrow that full amount it’s a good idea to reduce your living costs payments. Living costs payments are direct credited to your bank account, and your living costs payments start in the second week of your course (you are paid one week in arrears).
How do I get one?
To receive a student loan you need to be a New Zealand citizen, permanent resident or refugee, and you have to be enrolled in a Tertiary Education Commission approved course. You’ll need to be studying full time, or part time if your course goes for 32 weeks or longer.
You’ll need to take out a new loan every time you start a new course, but each new loan will be tacked on to your total to keep things relatively simple.
To get your student loan you’ll apply through Ministry of Social Development agent Studylink. Their job is to ensure that students get the finance and support they need so they can complete their study, and most tertiary campuses have a Studylink office on site. If you have any questions about your loan or the loan process, they should be your first port of call in getting things sorted.
How do I pay off my student loan?
Paying back your student loan is as simple as choosing the correct tax code once you start working, although you can also make voluntary repayments on top of your compulsory payments if you’d like to pay off your loan more quickly.
If you earn more than the repayment threshold of $19,084 – around $367 a week – you’ll be required to start making compulsory payments, which are deducted from your pay as you earn. While your student loan will accrue interest, this interest is wiped each year for student loan borrowers working in New Zealand. If you live outside of New Zealand the interest rate is 6.6 percent.
You’ll receive regular statements from Inland Revenue Department so you know the balance of your loan and how much you have left to pay back each year. You can also check the balance of your student loan online at www.ird.govt.nz.
For more information about loans check out the loan providers in the NZS.com directory.
Being burdened with a large loan is a huge commitment before you’ve even entered the professional workforce, and trying to understand all the ins and outs of your loan structure can be intimidating – especially if you’re not an accounting major.
Getting to grips with the basics of your student loan will help you make an informed decision when it comes to deciding what courses you’ll take, and how much of your expenses you’ll add to your overall loan total. It might also make you think twice before claiming extra money for ‘course related costs’ so you can spend your first week of orientation spending large at the uni bar.
For further financial information from other parties, there are a number of businesses offering financial advice that you can talk to.
What is a student loan?
Basically, a student loan can help to finance your study. In New Zealand it's made up of three parts: compulsory fees, course-related costs and living costs, and while it may seem like free money if you’re fresh out of high school, you will ultimately have to pay it back.
When you apply for a loan, you choose the parts you want to apply for, depending on what you need and qualify for. Remember that you should only borrow what you need. You’ll be signing a contract with the Government agreeing that you’ll pay back your student loan once you start earning money
Compulsory fees
The compulsory fees part of your student loan allows you to borrow the total amount of fees for your course, including the compulsory Student Association fees that are charged by your education provider.
Whether you already have some money saved for your education, or you’re starting with a blank slate and empty savings account, you can borrow either all or part of your compulsory fees. If you decide to pay part of your fees the amount you've paid will be deducted from the amount you can borrow. That means that if your fees for the year are $6000 and you’ve saved enough to pay $2000 towards them, you will be able to borrow $4000 for compulsory fees for your student loan.
Your compulsory fees are paid directly to your education provider, so you must be fully enrolled in your course for any part of your student loan to be paid.
Course related costs
If you do have genuine course related costs you need assistance with, such as stationery, books, computer equipment, travel, you can borrow up to $1000 a year for course-related costs. You don't have to claim all your costs at once, but you will need to provide evidence of your costs like a quote or receipt.
Course-related costs are paid directly to your bank account, with the earliest payment being 14 days before your course starts. You can apply for your course related costs online.
Living costs
The living costs part of your student loan can help with your weekly expenses if you don't qualify for a Student Allowance or don't qualify for the full amount of the Student Allowance.
You can borrow up to $163.38 each week for living costs while you're studying, but if you’re also working and don’t need to borrow that full amount it’s a good idea to reduce your living costs payments. Living costs payments are direct credited to your bank account, and your living costs payments start in the second week of your course (you are paid one week in arrears).
How do I get one?
To receive a student loan you need to be a New Zealand citizen, permanent resident or refugee, and you have to be enrolled in a Tertiary Education Commission approved course. You’ll need to be studying full time, or part time if your course goes for 32 weeks or longer.
You’ll need to take out a new loan every time you start a new course, but each new loan will be tacked on to your total to keep things relatively simple.
To get your student loan you’ll apply through Ministry of Social Development agent Studylink. Their job is to ensure that students get the finance and support they need so they can complete their study, and most tertiary campuses have a Studylink office on site. If you have any questions about your loan or the loan process, they should be your first port of call in getting things sorted.
How do I pay off my student loan?
Paying back your student loan is as simple as choosing the correct tax code once you start working, although you can also make voluntary repayments on top of your compulsory payments if you’d like to pay off your loan more quickly.
If you earn more than the repayment threshold of $19,084 – around $367 a week – you’ll be required to start making compulsory payments, which are deducted from your pay as you earn. While your student loan will accrue interest, this interest is wiped each year for student loan borrowers working in New Zealand. If you live outside of New Zealand the interest rate is 6.6 percent.
You’ll receive regular statements from Inland Revenue Department so you know the balance of your loan and how much you have left to pay back each year. You can also check the balance of your student loan online at www.ird.govt.nz.
For more information about loans check out the loan providers in the NZS.com directory.
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