In the last three years, money written off due to bankruptcy has increased 114 percent to nearly $6 million. Photo: 123RF
Fewer tertiary students accessed funds through the Student Loan Scheme last year, but the amount they borrowed was up.
Meanwhile in the last three years, money written off due to bankruptcy has increased 114 percent to nearly $6 million.
The Student Loan Scheme Annual Report says $1.4 billion was borrowed through the Scheme, an increase of 0.4 percent compared to 2022.
The report shows 120,918 students borrowed from the scheme, down 6.8 percent.
Students used around just over half (57 percent) of the total they borrowed to pay for course fees.
Meanwhile loan repayments were similar in the last financial year, but overdue repayments were up by $200m, with overseas-based borrowers owing the majority of the debt.
The report said overseas-based borrower defaults also made up an increasingly large amount of overdue repayments.
Just over 70 of overseas-based borrowers owed 92.6 percent of the total overdue student loan debt as of 30 June.
The report said that was a continuation of a long-term trend, and those who remained in New Zealand were more likely to pay their loan off in half of the time.
"Whether a borrower stays in New Zealand or goes overseas makes a significant difference to the forecast repayment times. Half of the borrowers who remain in New Zealand can expect to repay their student loans within 5.2 years, while three-quarters can expect to repay within 9.1 years.
"For borrowers who spend time overseas, half can expect to take 11.0 years to repay their student loan, while three-quarters can expect to repay within 18.6 years."
In the year to 30 June, $5.7m was written off due to the bankruptcy of 151 individuals - more than double that in 2022/23 when $2.5m of loan debts were written off for 76 people.
In 2021/22, 34 people went bankrupt with $0.05m written off due to bankruptcy (although $0.56m was reversed, resulting in a net negative write-off of $0.06m).
In the year to 30 June 2024, 52,368 borrowers repaid their loans in full. The report said that between April and June 2024, Inland Revenue returned to using a range of approaches to improve compliance and reduce overdue repayments. This resulted in 10,500 more customers meeting their obligations and a $13.6m drop in overdue debt.
More than 934,000 borrowers have fully repaid their loans since 1992, when the scheme began. Average amounts borrowed per year have increased since that time, from $282 to $11,508.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
