Student loan costs

announced:

The latest Student Loan Scheme annual report shows an 11 per cent increase in repayments and a decrease in the overall cost of the scheme, Tertiary Education, Skills and Minister Steven Joyce says. …

“The write-down on student loan lending reached 47 cents for each dollar lent in 2008/2009. We have now reduced that to 39 cents in the dollar, and are working to reduce the cost further.

  • The cost of lending has fallen 17.5% over the last three years. The cost fell from 47 cents per dollar in the 2009 valuation, to 39 cents per dollar in the current year.
  • Repayments increased by 11% to $767 million in 2011/2012
  • The median repayment time is 6.7 years and it reduces to 5.5 years for those remain in New Zealand until repayment

That's a pretty useful improvement in the loans scheme. In an ideal world we'd scrap interest free loans but that would be political , and just be reversed at the next election. The changes Joyce has made though are sustainable and worthwhile.

The annual report for the scheme is here. Some facts:

  • Average amount borrowed $7,633 and median $6,709
  • Average loan balance $18,507 and median $12,849
  • 29% of the adult have taken out a student loan at some stage
  • 24% of loan balances are under $6,000, 41% under $10,000 and 56% under $15,000. One third are over $20,000
  • 0.2% of loan balance are over $100,000

 

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