New Zealanders are ramping up debt significantly earlier in life with people as young as 22 owing tens of thousands of dollars - and all in the name of education.

More than 728,000 people owe about $15 billion and experts say we are not dealing with the issue correctly.

Almost 20 per cent of New Zealand's population has a student loan with Inland Revenue and the total student loan debt figure was $14.84 billion last year, and while considered "good debt", and interest-free, industry commentators say students often don't consider whether the debts are necessary or how they could try to minimise the money borrowed.

Pushpa Wood, director of the financial education and research centre at Massey University, said there was not enough emphasis on careers advice for students before deciding on university study, saying students often felt university was a necessary option even if the course was not going to guarantee a job.

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"When it comes to taking on a student loan, [students need to look at whether] the qualification they are going for is going to increase their ability to earn income or extend their horizon," Wood said.

"Some people do [their study] for pleasure, they love the subject and want to do it - that might seem like a good idea, but what is the actual occupational outcome and what is the forecast for that qualification," she said. "The other thing is how many people are actually using student loans as an investment in their future, because it is a good debt if it is being used to add to their ability to earn more, but [if not] then you really need to look at why you are borrowing it in the first place."

Although student loan debt has increased steadily since the scheme was set up, the number of students has increased at a slower rate, with students increasingly looking to study higher qualifications such as masters and post-graduate degrees.

The debt cost has also been boosted by increased fee costs, although the overseas-based borrower compliance initiative is gaining momentum and led to the collection of $202 million by June 30 last year.

The age of student loan borrowers is also dropping with 72.5 per cent of borrowers in 2014 under 27 years old.

Research from the Ministry of Education showed extra loan repayments had declined significantly since the introduction of interest-free loans, something Wood said was contributing to students borrowing.

To get its students thinking about how much they were borrowing, Massey University has begun an online course for first-time students which takes them through a short process looking at debt and how they could manage it whether they were living at home, in a hostel or in a flat - from day one.

"Debt is a debt," Wood said. "Interest free or not ... it still needs to be paid off. Therefore you need to have a plan before you start borrowing."

Andrew Forshaw, 25


What did you study?

Bachelor of Commerce and Bachelor of Science conjoint at Auckland University.

Andrew Forshaw.
Andrew Forshaw.
How much was your student loan debt?

$11,000.

Was your debt worth it?
The debt was worth it because I used it to live. My parents paid for my tuition but to afford to live out of home, having the security of the student loan (living costs) was really good. Ideally I wouldn't have taken the loan out at all but given the situation, the financial support from the loan was very helpful.

Has having a student loan affected your decisions around anything? Moving overseas? Buying anything?
No.

Is it stressful having a student loan, especially just out of uni when looking for a job?
My student loan was only $11,000 when I left uni so I didn't feel stressed about it at the time but it does bug me now watching 12 per cent of my pay cheque go to it every month. It somewhat stresses me out that after two years of paying off the loan I have only paid off just over half. But I am aware it is much less than what most people have.

Are you trying to pay it off faster than the minimum?
Yes " I have opted for 12 per cent of my pay cheque rather than the minimum 10 per cent.

Tips for student loans


with Pushpa Wood, director of the financial education and research centre at Massey University

1

Talk to careers advisers and family before deciding which course to do.

2 Consider how you can repay debt before you decide how much to take.

3 Accept you might have to make sacrifices to borrow less.

4 Consider getting a part-time job while studying to help with costs.

5 Work out a budget and stick to it - find out how much you need to earn if you are flatting.

6 Look at whether you could pay an extra $10 or $15 a fortnight to pay it off faster.

7 Or, keep paying the minimum and put savings into another account and at the end of the year see if you can pay a lump sum.

8 If you are doing a qualification simply for pleasure, try to pay for it out of the money you have rather than borrowing.

9 Borrow for your needs not for your wants.

10 Be careful in the study you choose and the reasons you are choosing that course.