Home Uncategorised A decade of neglected student loans sees 8280 people owe $115 million

A decade of neglected student loans sees 8280 people owe $115 million




Stuff report Jessica Long Apr 15 2019

If you are unemployed, living in New Zealand and quit studying a certificate-level tertiary qualification you are less likely to pay off your student loan.

Figures released this month showed 8280 people made little or no repayments to student loans in the decade after they finished or pulled-out of tertiary studies in 2006, which put the Government into about $115 million worth of debt. 

In the 2017/18 tax year that amount had decreased by about $17.7m, but borrowers not repaying their loans made up 17 per cent of the total $2.7 billion owed in student repayments, as of June 2018.

A report, commissioned by the Ministry of Education, aimed at identifying the characteristics of a “persistent non-repayer” – someone who made no repayments for three or more consecutive years – said understanding why  they weren’t paying back debt was important for monitoring the impact of Government policies.

“This high proportion of non-repayers, particularly following the introduction of interest-free loans, has contributed to the increased Government subsidy in the Student Loan Scheme,” the report said.

The authors said it was “very likely” these people were not able to make repayments because the leavers’ income fell under the repayment threshold. It added that the number of persistent non-repayers was expected to reduce as new policies were introduced to tighten student loan eligibility. However, Tertiary Education Union president Michael Gilchrist said further evaluations were needed to properly identify why those patterns emerged.

The report was consistent with the issues tertiary sectors faced, outlined in the Government’s reform of vocational education. 

Yet, “tightening eligibility criteria is not responding to the underlying problem of these results”. On the contrary, more investment was needed to support students and better connect institutions like polytechnics with communities.

Almost 70 per cent of non-repayers did not complete their qualification – more than double the proportion of those who completed their qualification, which Gilchrist said was a result of poor policy settings that “have consistently underestimated the time and investment these learners require and deserve”. Students needed a system that was built on inclusion, he said.

Data found trends in certain demographics which mostly included women, was skewed toward people of Māori, Pacific and Asian descent, people over the age of 25 and students who were on a benefit or pension prior to study.

People who studied at  lower qualification levels were most affected, the only exception was at postgraduate degree levels.


  1. So they have to commission a report on why students are not repaying their student loans? For free I will tell you. There is a lax attitude and a sense of growing entitlement in NZ due to everyone being informed they are victims of circumstance, that nothing is your fault and taking responsibility for your actions is unnecessary so if it doesn’t suit you to pay your way, then why bother when there is insufficient deterrent to do so. After all, it isn’t your fault so it must be the system and the chance you can duck the payment is worth a chance.



  2. No penalties for non completion. Even if student find that they no longer wish to continue the course of study and want to change to a different discipline they should be encouraged to follow through with the courses that fees have already been paid for, Universities get to double and triple dip of course.



    • Was it 2005 when Labour did the whole interest free Student loan bribe? I have to say, that interest rate (prior to the bribe) motivated me in paying off the student loan as fast as I could.

      I was actually quite pissed off when Clark did that. Had I known the old bribe-o-metre was going to happen, I would have been in absolutely no hurry to pay it off.



  3. That Gilchrist guy sums it up “Students need a system built on inclusion”.
    Why did I just know that word inclusion was going to pop up as a causing factor?.
    How about also the lack of diversity amongst teaching staff is traumatising students from minority backgrounds causing non completion of courses and ongoing mental health issues.
    See it’s real easy to write this bullshit if you put your mind to it.



    • In jest, the truth.

      How about also the lack of diversity amongst teaching staff is traumatising students from minority backgrounds causing non completion of courses and ongoing mental health issues.

      You may just be correct, the lack of diversity of political thought is almost certainly traumatising students today, although whether just those from minority right-wing backgrounds remains conjecture.



    • It is too much diversity that is causing the problems, I was reading that populations of one hundred self identifying races get their own category in the census, when we have one that is.



  4. I spent last Saturday arvo on a Hop Tour (what we call a pub crawl but visiting craft breweries) in Sydney with my daughter’s friends, one of which told me that when he was at AU he once put a $1000 on black at the roulette wheel in Sky City and although he made a $1000 he really didn’t care if he lost because it was free money.



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