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Understanding your student loan

10/02/2017: With University starting soon the process can be rather overwhelming and when you need to apply for a student loan it can become even more daunting. Monteck Carter is all about making life easier…

Inventive ways to pay off your student loan

“Inventive ways to pay off your student loan – Impossible you say? Not really….

Access to student loans tightening up

If you have started or will start study after 1 January 2014, there is now a residency requirement of three years (previously two years) before you are eligible for a Student Loan which applies to those who are not New Zealand citizens, refugees, or protected persons. Age limits apply for Student Allowances. The amount of assistance people over 40 are eligible for is limited to 120 weeks and students aged 65 or over are no longer eligible for a Student Allowance for study starting after 1 January 2014. Repayment obligations – don’t be late. If you defaulted on your student loan repayments while living overseas, but returned to New Zealand, the Inland Revenue can now request an arrest warrant if you are about to leave New Zealand. Inland Revenue and the Department of Internal Affairs now have an information sharing agreement allowing them to share contact details for overseas-based student loan defaulters when they renew or apply for their passport. Inland Revenue will be able to contact individuals to discuss their outstanding arrears.

Student loan myths

Busted! Debunking a few more student loan myths. IRD realised there were a lot of “facts” that have been misunderstood, misinterpreted or just plain missed out on. Here are a few more myths that they feel need busting. 1. My New Zealand repayment obligations if I’m employed are based on the annual repayment threshold of $19,084

Overpayment and refunds

You might be receiving an end-of-year repayment obligation notice which will show if you have further student loan repayments to make or you’ve paid more than you needed to for the year. If you’ve repaid your loan in full and your notice shows an overpayment, you can ask us to transfer the overpaid amount to pay another tax amount or (provided you don’t have an overdue tax bill with IRD) they automatically refund the overpayment. If you still have a loan balance, you can:

  • Leave the overpaid amount on your loan to pay off your loan more quickly.
  • Use the amount to pay off a future student loan obligation.
  • Use the amount to pay off another tax bill.
  • Ask for the overpayment to be refunded.

Student loans

If you’re in New Zealand and earn salary or wages, you need to add “SL” to your tax code from 1 April regardless of how much you earn, unless you have an exemption. This will ensure you’re making the right repayments toward your student loan through your pay.