Student Loans 101:
So, you are thinking about starting tertiary studies in New Zealand? Awesome stuff! There are a few options available for where you study, but to help you fund this study, a government-run organisation called StudyLink (a part of the Ministry of Social Development) is here to help.
Who is eligible for student loans?
If you are a New Zealand Citizen, or ordinary resident who has had a resident visa for more than 3 years, and spent this time in NZ, then you are eligible for financial support from StudyLink.
What can you get?
Whether you are studying full-time or part-time dictates how much you can get to help fund your studies. For definitions on what constitutes full-time, please see StudyLink’s website: https://www.studylink.govt.nz/about-studylink/glossary/full-time-definition.html
Compulsory Course Fees:
Paid directly to your tertiary institution
Covers the fees of enrolling in your chosen studies
Available for full-time and part-time students.
Living Costs
A weekly payment of $316.39 (as of March 2025) to cover living related expenses (rent, groceries, transport, utilities, etc.)
This amount changes every year to match the CPI increase.
Paid to your bank account.
Available for full-time.
Course Related Costs
A one-off amount of up to $1000 per year for course related expenses like textbooks, specialised equipment (like lab coats, drawing equipment) or technology for your studies.
Paid to your bank account.
Available for full-time students.
You do not have to take out living costs or Course Related Costs if you do not want to. They are entirely optional. There are also options to only request partial amounts of each of these loan components. For example, you may only require $450 of course-related costs or $200 p/week of Living Costs. This is easily managed through your MyStudyLink account.
Fees Free Final Year
From January 1st, 2025, any eligible students can get their final year of their tertiary education paid for. This covers the compulsory course fees component only and has a maximum of $12,000. If your course fees are less than this for your final year, you do not get the remaining amount paid to you. If you have already used the old scheme of First Year Free (between 2018 and 2025), you cannot claim Final Year Free as well.
To claim this, you can do so through your IRD account. This will be available from early 2026. You may still need to take out a Student Loan through StudyLink to cover the costs, before you get the entitlement recognised and refunded to you through myIR.
Student Allowance vs. Student Loan
The key difference between a Student Allowance and a Student Loan is that a Student Loan must be paid back. Student Allowance does not.
There are stricter requirements for Student Allowance, which are tested against your parents’ income up to the age of 24.
If you are entitled to Student Allowance, you are also entitled to Student Loan Living Costs, but the maximum amount per week is still the same for those with just a student loan.
Additionally, anyone who has a Student Allowance is eligible for an accommodation supplement. This is an additional amount that depends on where you live, and is not required to be paid back.
Students can receive a maximum of $316.39 per week in support, not including any accommodation supplement. How this is made up depends on the level of student allowance you qualify for.
If you receive a $200 weekly allowance, you can borrow an additional $116.39 as a student loan living costs payment to reach the maximum. The loan portion must be paid back, but the allowance does not.
If you receive a $300 weekly allowance, you only need to borrow $16.39 to reach the maximum weekly amount. Again, the allowance is yours to keep, but the loan must be repaid.
If you qualify for the full $316.39 as a weekly allowance, you do not need to borrow anything. The entire amount is non-repayable.
As with Student Loans, you do not have to take the full amount of Living Costs payments if you do not wish/do not need. A reminder that anything on a Student Loan must be repaid.
How do I pay back my loan?
You can pay back your loan through deductions from your pay when you start working full-time/above the income.
The amount you pay back is 12% on any income above the payment threshold. The thresholds are as follows:
$464 if you're paid weekly.
$928 if you're paid fortnightly.
$1,856 if you're paid every 4 weeks.
$2,010.66 if you're paid monthly.
You will have a tax code that ends with SL to indicate that you are required to make student loan payments. If you are paid less than the threshold, you will not pay anything towards your student loan for that pay period.
As long as you remain in New Zealand, or undertaking aproved further study overseas, your loan remains interest-free. If you are working or living overseas, then you will pay interest on your student loan.
You can apply for reduced reduction rates, if you are eligible, and can do this through the Inland Revenue Department, which will reduce your student loan repayments.
Conclusion
At first, Student Loans and Student Allowances may seem complex, but when you start to understand what you are eligible for and how much this is, it starts to make more sense.
For more details about Student loans, Allowance, Fees Free and Repaying your Loan, check out the websites below:
Student Loan: https://www.studylink.govt.nz/products/a-z-products/student-loan/index.html
Student Allowance: https://www.studylink.govt.nz/products/a-z-products/student-allowance/index.html
Fees Free Final Year: https://www.feesfree.govt.nz/final-year/
Repaying your loan: https://www.ird.govt.nz/student-loans/living-in-new-zealand-with-a-student-loan/repaying-my-student-loan-when-i-earn-salary-or-wages
Opinion by Adam-Wong Toi