Overdue student loan repayments hit more than $2.2b

A report said that as at June 30 this year, 635,235 people had student loans. Photo / 123RF

John Gerritsen of RNZ

Student loan repayments reached a high of $1.63 billion this year but overdue repayments exceeded $2.2b.

The Student Loan Scheme Annual report said most of the overdue payments were owed by 77,000 people now living overseas.

“Although the number of overseas-based borrowers with overdue debt decreased by 0.6 per cent, the value of the debt has increased by 9.2 per cent when compared to last year. This is because more than 67 per cent of overseas-based borrowers in debt have been outside New Zealand for more than five years, and with interest, late payment interest and the amount of assessed loan that is overdue, the amount is continuing to grow,” the report said.

It showed that compared with 2021, fewer students used the scheme in 2022, but they borrowed more money on average.

“Compared with the 2021 calendar year, in 2022: $1386 million was borrowed through the scheme, a decrease of 7.5 per cent; 129,711 students borrowed from the scheme, a decrease of 11.8 per cent; there were 28,128 first-time borrowers, a decrease of 17.6 per cent,” the report said.

“For those students who borrowed in 2022, the average amount borrowed was $10,689, an increase of 4.8 per cent ($492) on the previous year.”

The report said repayments in 2022-23 reached their highest level on record: $1.63b, $29m more than the preceding year.

The report said as at June 30, 2023, 635,235 people had student loans, a slight reduction since the previous year, and they owed a total of $15.9b.

However, the estimated “fair value” of that total was just $9.4b due to the cost to the Government of lending the money to students.

In addition, government agencies spent $46m administering the scheme last year, $8m less than the previous year.

The report said 1.7 million people had borrowed $32.9b from the student loan scheme since it started in 1992.

It said 882,000 people had repaid their loans in full in that time.