Student loan repayment rates will increase from Monday in a move the Government says will mean loans will be paid off quicker. Tertiary Education, Skills and Employment Minister Steven Joyce said the median repayment time will decrease by around four months because of the new 12 percent rate.The Government’s 2012 budget increased the rate from 10 cents to 12 cents per dollar of income. The new rate would save the Government $184.2 million over four years, Mr Joyce said.
“Increasing the repayment rate is also assisting the Government to reduce the cost of the scheme for taxpayers at a time of significant fiscal pressure.”
The change will not impact people who receive income-tested benefits and borrowers who cannot meet their repayments can still apply for hardship provisions. Only borrowers with income over the current threshold of $367 per week or $19,084 per year will be affected. Read more...
