Student loan repayment rate increase

The Student Loan repayment rate will increase from 10 cents to 12 cents in every dollar earned over the repayment threshold of $367 a week or $19,084 a year.

This increase was announced in Budget 2012 and will come into force on 1 April 2013. The median repayment time for all borrowers will decrease by about five months.

Mr Dunne says that increasing the repayment rate will help the Government to reduce the cost of the Student Loan Scheme at a time of significant fiscal pressure and that the change will improve taxpayers' investment in the scheme and in tertiary education.

"With borrowers paying off their loans faster, the Government will be able to invest more in the next generation of students. New Zealand-based borrowers will pay the same amount in total, but the key thing is that they will clear their loan faster," he said.