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STUDENT LOAN Powered By Docstoc
					WHAT’S IN A

A student loan can help to finance your tertiary studies. You can get a loan to help with
your fees, course-related costs and weekly living costs. But remember, only borrow
what you need.
This booklet tells you the things you need to know about getting a student loan and
paying one back.
Things to think about                  3
Seven steps to apply                   4
What’s in a student loan?              6
Your student loan account              9
About your student loan
entitlement                          10
Passing at least half of
your previous study                  11
Paying off your student loan         12
Definitions                          13

     When you get a student loan you’ll be in contact with two government departments –
     StudyLink and Inland Revenue.
     StudyLink’s role is to tell you about the student loan and help you organise your loan application.
     Inland Revenue take responsibility for your loan the year after your course has ended.
     They assist you to comply with your obligations as a student loan borrower, until the loan
     is paid back.
     Changes to student loans are underway with the recent enactment of the Student Loan
     Scheme Act 2011. These changes will improve how student loans are managed, repaid and
     administered. For more information, go to
     Go to to find all the information you need and to
     understand how StudyLink and Inland Revenue work together to administer Student Loans.
     If you would like to know more about applying for a student loan visit StudyLink’s website
     If you would like to know more about repaying a student loan visit Inland Revenue’s website or call 0800 377 778.
One of the challenges for people considering tertiary education for the first
time is having an understanding of all of the costs involved with study and the
financial help available to help with those costs.
The ‘Thinking about study’ section of StudyLink’s website includes case studies
and videos of students talking about their experiences to help you understand
what it will cost you to study. It also provides information on the different options
you may have for financing this investment into your future.
A student loan can help to finance your tertiary studies. But remember, it’s a
loan that you have to pay back.
When you have a student loan you need to start paying it back once you earn
over a certain amount – it could take years to pay off.
So, think carefully about how you use it:

> Do you really understand what’s                 > Are you entitled to a student allowance
  involved in paying back a loan?                   that can help with your living expenses
> Is there a scholarship or grant you               and which you don’t have to pay back?
  may be able to get?                             > Is there extra help with costs (such
> Have you thought about working                    as help with health costs or childcare)
  part-time while you study?                        that you may be entitled to?

What you borrow you’ll have to pay back, so only borrow what you need.

Tama borrowed $29,000 to complete his studies. He earns $35,000 a year and makes the
minimum repayments each week. It will take him a little over 18 years to pay off his loan.
Kim worked part-time while studying so she only borrowed $14,000. She also earns
$35,000 a year and pays the minimum amount each week which means she’ll pay off her
loan in less than 9 years.
You can do your own calculations at Inland Revenue’s website

Visit the Tools and Calculators section of our website to get an idea
of what it will cost you to live, how much you may need to borrow and what it will take to pay
back your loan.

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    1   Apply at for
        your financial assistance

    2   We will start processing                   We need to check the information you gave us, you
                                                   don’t need to do anything at this point unless you hear
        your application                           from us.

    3   We will contact you                        You will receive a letter telling you what we need next.
                                                   Make sure you read it, sign and return it (if required)
                                                   and send us any documents we ask for.

    4   Use MyStudyLink to track                   – check your student allowance and student loan
                                                     application status
        your application and…                      – view and accept your student loan contract
                                                   – check your student loan balance, change the amount
                                                     of your living costs payments and apply for your
                                                     course-related costs
                                                   – view details of your next payment and previous
                                                   – view your mail online.
                                                   Please note: MyStudyLink only displays payments and
                                                   information relating to student loan, student allowance
                                                   and scholarships.

    5   We check your details with                 We will contact your education provider prior to the
                                                   start of your course to confirm you’re fully enrolled.
        your education provider                    You don’t need to do anything further at this point.

    6   We will finish processing                  We will send you a letter telling you what you qualify
                                                   for and when your payments will start.
        your application
    7   Your payments can start                    The earliest your payments can start is in the second
                                                   week of your course. This is because we make
                                                   payments in arrears.


    If you’re applying for the first time, we need to see:                 EXAMS FINISH
    – your birth certificate or passport
    – your passport or citizenship papers
       (if you weren’t born in New Zealand)
    – a pre-printed deposit slip from your bank
    – a pre-printed letter or notice from Inland Revenue
    – your marriage certificate or deed poll papers (if applicable).
    We may also need to see proof of your:
    – income
    – partner’s income
    – parent(s)’ income if you’re under 24
    – accommodation and/or disability costs.

    Sometimes this won’t happen until the week before your
    course starts. This depends on the way each education provider
    You can use MyStudyLink to check if your enrolment details
    have been confirmed.

    If you’ve signed up to view your mail at MyStudyLink we’ll notify
    you (by text or email) when you can view your letter online.

    Use MyStudyLink to check your bank account number and                 COURSE STARTS
    address details prior to the start of your payments.


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      There are three parts you can borrow from a student loan: compulsory fees; living costs; and
      course-related costs. You choose the parts you want to use depending on what you need and
      what you qualify for.
      There are also fees and charges on a student loan. A $60 establishment fee is added to your
      loan every time you open a new a loan account1.
      Interest is charged on the money you have borrowed and the establishment fee. The interest
      rate is set out in your loan Terms and Conditions. This may be written off by Inland Revenue,
      who will check if you qualify once your loan account has transferred to them.
      From 2012 you’ll also be charged a fee of $40 by Inland Revenue in every tax year you have an
      outstanding loan balance with them of $20 or more, unless you’ve paid an establishment fee with
      StudyLink in the same tax year.
      Think carefully about how much you need and only borrow that amount. Remember, only
      borrow what you need.

      This pays the compulsory fees for your course (including compulsory Student Association
      fees). It doesn’t include special charges such as penalty fees for late enrolment,
      administration charges for paying by instalments or optional service fees.
      As long as your course is approved by the Tertiary Education Commission and full-time or
      part-time and 32 weeks or longer, you can borrow the amount of fees your education provider
      requests from StudyLink.
      If you are studying part-time for less than 32 weeks, you need be studying at least 0.25 EFTS2
      to be entitled to a loan for fees only. If you don’t know whether your course is approved for
      student loans, ask your education provider.
      Your education provider will tell StudyLink what your fees are. Your fees are then paid directly
      to them. The payment will be made two weeks before your course starts or seven days from
      the day your first Loan Entitlement Advice (LEA) letter is sent to you – whichever is later.
      You can pay some of your fees yourself. If you’ve already paid for all of your fees with your
      own money, or if someone else has paid your fees on your behalf, you won’t be able to use
      this part of the loan. If you’ve partially paid your fees, the amount you’ve paid will be deducted
      from the amount you can borrow.

    For example, if your fees are $1,500 and you paid a $100 deposit before you applied for the
    student loan, your education provider can only ask for $1,400 for compulsory fees.

     If you withdraw from your course you are still responsible for repaying your loan. If your
     education provider refunds all or part of your fees, the refund will be paid directly to your
     loan account.

      1 See page 9 for an explanation of student loan accounts
      2 See page 13 for definition

This helps with your weekly living costs, especially if you don’t qualify for the full amount
of student allowance. Your course must be full-time1 or approved limited full-time1 status
to qualify for living costs.
Your education provider can tell you whether your course is full-time. In certain circumstances,
you may still be able to get a loan if you are unable to study full-time and are approved limited
full-time status by StudyLink. To find out more go to StudyLink’s website
You can borrow up to $169.51 a week for living costs while you’re studying, or on a study break
of three weeks or less, like mid-semester breaks. If your break is more than three weeks and
you’re unable to find work, you may be able to get the Unemployment Benefit Student
Hardship. For more details, visit StudyLink’s website
If you choose to receive the maximum amount of living costs each week you may choose
to have this adjusted automatically through the Consumers Price Index1 (CPI).
You decide how much you want to borrow so if you don’t need the full amount, you can
ask for less. You’ll only get paid living costs from when you apply for them – they can’t be back-
paid if you apply late or if, at any stage, you increase the amount you want to get.

Tama borrows $100 a week at the start of his course. A few weeks later, he decides to
increase his living costs to $120 a week. This means he will only start receiving $120 from
the week that he requested it. He won’t be back-paid the balance of $20 for the weeks where
he requested $100.

The earliest your living costs payments can start is the second week of your course because
you’re paid one week in arrears. This means your payment for each week isn’t made to you
until the following week.
The payments are direct credited to your bank account once a week. You can change the
amount of living costs you borrow or view your payments at any time using your MyStudyLink
account at

In some situations you may be eligible for living costs and also be receiving a student
allowance. In these cases the amount of living costs you can receive will be reduced by the net
amount of any student allowance payments received.
For example, where a student allowance rate is $167.83 and the nominated living costs is
$169.51, the amount of living costs payable will be $1.68.
If your loan for living costs is approved before your student allowance, you’ll get the full
amount that you asked for. Once your student allowance is approved, any back-payments
you get will automatically be used to repay the difference in the living costs you’ve already
borrowed for the same period.

1 See page 13 for definitions

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    This helps with costs related to your studies, for example:

    > text books
    > computer equipment
    > childcare
    > travel.
    For study starting on or after 1 January 2012, you’ll need to be studying full-time1 or limited
    full-time1 with StudyLink’s approval to be eligible for course-related costs.
    You can borrow up to $1,000 per loan account (usually a 52 week period) for course-related
    costs. You don’t have to claim all your costs at once, just specify when you apply how much
    you need. You can claim the balance at any time up until your course finishes.
    You can apply for your course-related costs online using your MyStudyLink account.
    Using MyStudyLink you’re able to:

    > apply for course-related costs
    > view the status of your course-related costs applications including payment date.
    Course-related costs are paid directly to your bank account – the earliest StudyLink can
    do this is 14 days before your course starts.
    You don’t have to apply for the full amount of course-related costs, living costs or course
    fees – you decide which part to apply for and how much you need to borrow from each.

    You can’t get a loan for living costs if you’ll be getting a Work and Income benefit while
    studying. Remember to talk to Work and Income about your study plans as it could affect
    your benefit entitlement.
    If you get the Training Incentive Allowance, the amount you can get for compulsory fees
    and course-related costs goes down by the amount of Training Incentive Allowance you
    get (not including any Training Incentive Allowance you get for childcare, transport and
    disability-related costs).

    1 See page 13 for definitions

Once your loan is approved, StudyLink will set up a loan account. This is an account that
keeps track of your transactions.
In most cases, your loan account with StudyLink will run for 52 weeks from the day you
start your course – unless your course finishes before 31 December in which case it will
close on 31 December. You can’t use your loan once your loan account has closed.
After your loan account has closed your loan balance will transfer to Inland Revenue on
28 February the following year.
Inland Revenue is then responsible for collecting repayments from you until your student
loan is paid back.
In most cases you need to apply for a new loan each time you start a new course.
In some cases you may have more than one loan account open. If you are studying more
than one course, and your second one starts before the other one finishes, you may have
two loan accounts.

Tama is studying two courses. His first course runs from March 2011 to August 2011.
His second course runs from July 2011 to June 2012. He’ll have to apply for a new loan
for his second course even though his first course won’t have finished before his second
course starts. StudyLink will open a new loan account for him.

You’ll need to sign a new loan contract (StudyLink will send this to you) and pay the establishment
fee for every loan account you open. You’ll also need to pay a fee to Inland Revenue every tax
year you have a loan balance with them of $20 or more unless you’ve paid an establishment
fee in that tax year.

                                                                      WHAT’S IN A
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     If you’re under 18 years old, one of your parents1 (or a guardian) must sign your loan contract
     to show they give their consent to you taking out all three parts of the loan.
     It doesn’t mean they’re guaranteeing your loan. You’re still fully responsible for paying it back.
     Once your parent has signed the contract they can’t withdraw their consent.
     If you’re legally married or in a civil union, have a dependent child or receive an Independent
     Circumstances Allowance2, you don’t need a parent to sign your contract.

     There is a life-time limit of 7 EFTS1 for student loans.
     The life-time limit includes all study that you have had a student loan for, from 1 January 2010.
     Full-time students generally have study loads of between 0.8 EFTS and 1.2 EFTS for a year.
     For a full-time student, 7 EFTS is equal to about 7 or 8 years of study. Part-time students use
     less EFTS each year.
     Once you have used any part of the student loan, such as living costs, fees, or course-related
     costs, the EFTS for that loan will count towards the 7 EFTS limit.
     You can use more than 7 EFTS in some situations, including:

     > finishing a paper or course even if it takes you over the 7 EFTS limit
     > up to an additional 1 EFTS to complete post graduate study3
     > up to an additional 3 EFTS if you undertake doctoral study.
     Generally, you will not be able to receive more than 10 EFTS of student loan entitlement
     when these extensions are included.
     If you withdraw from a programme within 30 days of the date it started, and receive a refund
     of all your tuition fees before the end of that programme, it will not be included in your
     lifetime limit.
     For more information go to

     1 See pages 13 and 15 for definitions.
     2 The Independent Circumstances Allowance is a student allowance for 16-23 year olds with exceptional
       circumstances. For more details visit StudyLink’s website
     3 Post graduate study includes Masters and Bachelor Honours study

Students need to have passed at least half the total EFTS1 of their course load in order to
continue receiving a student loan.

The assessment of performance includes courses of study ending in 2009 or later.
The EFTS count starts once you have used one or more parts of the student loan
(eg living costs, course fees, or course-related costs).
Once you have completed 1.6 EFTS of study (this is about two years of full-time study), you will
need to have passed at least half the total EFTS of your previous study in order to continue
receiving a student loan. This performance is assessed using a rolling five year assessment
period1 and includes any study you use a student loan for and any you pay for in another way.
If you lose access to the student loan you can regain it by passing at least half of your total
EFTS without using a student loan or by providing evidence that there are sufficient reasons
beyond your control for not passing at least half. You can also regain eligibility as part of the
rolling five year assessment period.
If you withdraw from a programme within 30 days of the date it started, and receive a refund
of all your tuition fees before the end of that programme, it will not be included in your
performance assessment.
For more information on passing at least half the EFTS of your previous study go to

1 See page 13 for definitions.

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     Once you’re earning more than the repayment threshold you need to start repaying your loan,
     even while studying. Your income includes salary and wages, self employment or other
     income. The current threshold is on Inland Revenue’s website at

     COMPULSORY REPAYMENTS                            If you make voluntary repayments of $500 or
                                                      more in a year to Inland Revenue you may
     IF YOU EARN A SALARY OR WAGES, STUDENT           qualify for a 10% voluntary repayment
     ALLOWANCE OR OTHER INCOME SUPPORT                bonus.
     You’ll need to tell your employer you have
     a student loan and give them the correct tax     For more information on repaying your loan
     code. You can do this by selecting a student     go to or see
     loan tax code on your Tax code declaration       Inland Revenue’s guide Student loans –
     (IR 330) and giving them the form. Then your     making repayments (IR 224).
     employer or the organisation paying you can      For more information on the voluntary
     make repayment deductions from your              repayment bonus go to
     income on your behalf.                 

                                                      If you don’t make repayments when your
     Repayments won’t automatically be deducted
                                                      income is over the threshold, you’ll end
     from your income. You’ll need to file an
                                                      up with a bill at the end of the tax year.
     Individual income tax return (IR 3) at the end
                                                      You may incur penalties on this.
     of the tax year and Inland Revenue will work
     out how much you need to repay towards           If Inland Revenue sees you’re on the wrong
     your student loan. This will normally be due 7   tax code, they can ask your employer to
     February the following year. You may also        change the code to the correct one.
     have to make interim repayments for the
     following year to ensure you’ve paid             GOING OVERSEAS
     something towards your loan during this year.    You’ll need to contact Inland Revenue before
                                                      you leave. Generally you’re not eligible for an
     IF YOU HAVE INCOME FROM MORE                     interest-free student loan if you’re away for
     THAN ONE SOURCE                                  6 months (184 days) or more. But you may
     If your income from all combined sources         be entitled to a repayment holiday of up to
     is over the threshold you’ll need to make        three years.
     repayments. If at least one source of income
     is from salary and wages, student allowance      For more information about going overseas
     or other income support you should consider      and how it affects your student loan go to
     using a special repayment deduction rate. or see Inland
     This tells your employer to make deductions      Revenue’s factsheet Student loans – going
     from your income at a certain rate. You can      overseas (IR223).
     apply for a special repayment deduction rate
     through Inland Revenue.                          NOTIFY ME
     Go to      This is Inland Revenue’s email service that
     to find more information on which tax code       provides useful information to help you
     to use.                                          manage your loan once it’s transferred
                                                      to Inland Revenue (the year after you
     MAKING EXTRA REPAYMENTS                          drew down your loan).

     If you are able to make extra repayments         To subscribe go to
     towards your loan, you’ll pay it off faster.
The Consumers Price Index (CPI) is a measure of the price change of goods and services
purchased by private New Zealand households. The CPI measure is also used to determine
any adjustments to student allowance rates and student loan living costs borrowing limits on
1 April each year. For more information on the CPI process go to the Statistics New Zealand

EFTS stands for Equivalent Full-time Student. EFTS is a measure of the amount of study
or the workload involved in undertaking a course.
The Tertiary Education Commission assesses the content of each course and then allocates
the appropriate EFTS value.
A year of full-time study can vary between 0.8 EFTS to 1.2 EFTS. Part-time or part-year
students use smaller amounts of EFTS for their study.
If you’re unsure of the EFTS value of your course, check with your education provider.
Visit our website to use the Student Loan performance calculator and
for links to a number of education provider websites that explain how they calculate EFTS for
their courses.

This is an assessment where the student’s performance over the five years of study prior
to their current application is considered. This means that a student who applies for study
in 2014 will have the results of their study from 2009 to 2013 checked. When they enrol again
for study in 2015 the results from their 2009 study will be excluded and only the five years
from 2010 to 2014 will be checked. The performance assessment only starts once a student
has studied more than 1.6 EFTS in total since receiving a student loan for study ending in
2009 or later.

        FOR EXAMPLE:

 STUDY YEAR       STUDENT          EFTS             YEARS ASSESSED                  TOTAL EFTS
                  LOAN             STUDIED                                          TO CHECK
 2009             Yes              1.0              None - assessment only          0.0
                                                    starts once 1.6 EFTS have
                                                    been studied
 2010             Yes              1.0              None - assessment only          0.0
                                                    starts once 1.6 EFTS have
                                                    been studied
 2011             Yes              0.8              2009 - 2010                     2.0
 2012             Yes              0.8              2009 - 2011                     2.8
 2013             Yes              1.0              2009 - 2012                     3.6
 2014             Yes              0.8              2009 - 2013                     4.6
 2015             Yes              0.8              2010 - 2014                     4.4

                                                                   WHAT’S IN A
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     The Tertiary Education Commission assigns an EFTS value to each course to determine
     if it meets the full-time status criteria for student loans.

           FOR EXAMPLE:

                                                       TO BE FULL-TIME

       12 weeks                                        0.3
       20 weeks                                        0.5
       32–52 weeks                                     0.8

     The study status of your course determines what components of the student loan you
     can access.

           FOR EXAMPLE:

       STUDY STATUS              FEES                  COURSE-RELATED          LIVING COSTS
       Full-time, full year      Yes                   Yes                     Yes
       (ie studying both
       1st and 2nd
       Full-time, part year      Yes                   Yes                     Yes
       (ie studying either 1st
       or 2nd semester
       Part-time,                Yes                   Yes*                    No
       full year
       Part-time, part           Yes                   No                      No
       year (Minimum EFTS
       required is 0.25)

     * For study starting on or after 1 January 2012, part-time full year students will no longer be
     entitled to course-related costs.
     Note: if the length of your course does not meet the required EFTS value to be full-time,
     StudyLink will check to see if there is any part or segment of your course which may still
     qualify as full-time.
     For example: If your course is 32 weeks long (full-year), you need to be studying 0.8 EFTS to
     be full time. If you are studying 0.4 EFTS in the first semester and 0.3 in the second semester,
     StudyLink will determine you are full-time for the first semester, but not for the full year.

Limited full-time status is a provision for students who are applying for financial help from
StudyLink but are unable to undertake a full-time course due to one of the following reasons:
> you’re finishing a recognised programme and to do this you need to study less than full-
  time but more than half of a full-time course, or
> your education provider supports your application to study less than full-time
  for one of the following reasons:
  – you have an illness that stops you studying full-time, or
  – you can’t study full-time where there is sufficient cause outside your control
    (this could include a disability which stops you studying full-time), or
  – it’s in your best interests to study less than full-time.
To apply for limited full-time status you need to complete a Limited Full-time application.
You can download this from StudyLink’s website

A parent is a natural, adoptive or whangai parent, a guardian, caregiver, step-parent,
partner of your parent, or any other person acting as a parent who is responsible for your
well-being and financial support.
Note: This may include a caregiver who receives an Orphan’s Benefit or Unsupported Child’s
Benefit only if they are acting in place of a parent. A caregiver who receives home for life
assistance from Child, Youth and Family will generally be a parent for Student Allowance
purposes. A caregiver appointed by the Chief Executive of Child, Youth and Family or an agent
recognised by the Children, Young Person’s and Their Families Act 1989 is not regarded as a
For more definitions and information relating to funding your study,
go to
For more information in relation to repaying your loan or interest charges,
go to

                                                                   WHAT’S IN A
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                                                                                          SLS (SEPT 11)

> check out what financial assistance you may be able to get
> apply for your student finances
> view and accept your student loan contract
> check your student allowance and student loan application status
> view and update your personal details
> check your student loan balance, change the amount of your living cost
  payments and apply for your course-related costs
> view details of your next payment and previous transactions
> view your mail online.


> check your loan balance
> see interest charged and written off
> send a secure email to Inland Revenue.
Go to and register under “Secure online services”. You’ll need
your IRD number to register and can activate your account by calling 0800 227 770.
Inland Revenue also has a Student Loan email service called Notify Me that provides
useful information to help you manage your loan. To subscribe go to – all you need is your email address.

STUDYLINK                                      INLAND REVENUE
Website:                 Website:
Phone: 0800 88 99 00                           Phone: 0800 377 778
Fax: 0800 88 33 88                             0800 self-service: 0800 257 777

To find all the information you need and to understand how StudyLink and Inland Revenue
work together to administer Student Loans, go to


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