Are you affected by the changes to student loans?
Email the Herald Newsdesk
Students who head overseas after study will have to give more thought to the loans they leave behind following student loan scheme changes announced in today's budget.
Among the changes, the repayment holiday for overseas-based borrowers will be reduced from three years to one, and borrowers will be required to apply for the repayment holiday before going overseas and provide a New Zealand contact.
The definition of income for student loan purposes will be broadened to improve fairness to New Zealand-based borrowers.
Revenue Minister Peter Dunne said the changes reflected the budget's focus of personal responsibility and better value for taxpayers.
"Changes to the repayment holiday provisions signal greater accountability for overseas-based borrowers on their student loans," he said.
"Regardless of where they go overseas, borrowers must provide a contact person and begin paying their loan once their holiday ends."
The Government has also made moves to limit lending to other borrowers who are less likely to pay back the debt.
Borrowing for those aged over 55 will be limited to tuition fees, part-time full-time students will not be able to borrow for course-related costs, and loan eligibility for students with overdue repayments of $500 or more will be restricted, and the repayment threshold will be held at $19,084 until 2015.
Tertiary Education Minister Steven Joyce said the changes would ensure people met their repayment obligations.
"We need to ensure that borrowers understand that when they choose to access the loan scheme, they are choosing to take on all the responsibilities that come with it."
The savings from the budget changes would be used to provide funding for new tertiary initiatives, Mr Joyce said.
Extra funding to tertiary education allocated in the budget includes $17.5m over four years for specific funding for English as a second language courses, $40m to raise New Zealand's profile overseas, and $42m for increased trade training.
Up to 750 additional places at new and high-performing private training establishments, as well as 40 additional medical places for 2012 were set out in the budget.