Students' loan help kicks off

By STACEY BODGER

Information packs telling students how to save thousands of dollars in interest on loans are being delivered this week.

The Government's decision to write off interest on some loans will save students about $420 million over four years.

About 177,000 students have taken out the loans, with an average debt, including accumulated interest, of $11,700.

Inland Revenue is sending information packs to students detailing the criteria for the interest write-off and how to apply for it.

The amount individual students will save depends on the size of the loan.

But, for example, the write-off would save a second-year student $1230 on a loan of $9202.

A first-year student with the same loan would save $548.

All full-time students are entitled to write off the interest charged on loans taken out from January 1.

For loans taken out last year or earlier, interest charged from April 1 this year will be cancelled.

Part-time students earning $24,596 or less also qualify.

The decision was announced last December after the Government promised to improve the affordability of tertiary education.

Tertiary Education Minister Steve Maharey said the interest charged on loans had been a huge disincentive when people were deciding whether to take up tertiary study.

He hoped the move would make study more attractive to beneficiaries and low-income earners.

The student loan interest rate of 7 per cent will remain at the same level next year.

To claim the write-off, students must provide Inland Revenue with their student ID number and the provider code of their tertiary institution.

They can lodge the details on the Inland Revenue website, or by phoning 0800 257 999.

Those who did not receive information packs should phone the 0800 number.

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