The student loan interest rate will stay at 7% for the year beginning 1 April 2005. The base interest rate (excluding inflation adjustment) has fallen from 5.5% to 4.2%.
Associate Revenue Minister David Cunliffe noted that about two-thirds of borrowers received some kind of interest write-off in the year ended March 2004, which amounted to $208m. During the same period, loan-holders repaid $447m.
According to 2001 figures, 20% of those who last borrowed in 1997 had completely repaid their loans, while around 50% had not made any progress in reducing their debt. For those who last borrowed in 1994, nearly 40% have repaid their loans, while 30% have yet to make a dent in theirs, seven years after completing their studies.
Those having trouble with their debt were slightly more likely to be male and Maori or Pasifika.
As of June 2004, 418,761 people – 13.2% of the population above 15 years of age – have a student loan.