Trans-Tasman differences in student loans

Abstract

This paper compares student loan and other support arrangements in Australia and New Zealand, with particular reference to the access to these arrangements by citizens of the other country.Both countries provide income contingent student loans to tertiary education students. New Zealand offers them to a broader range of students, but has lower repayment income thresholds and higher repayment rates and charges no interest for those who remain in New Zealand, while Australian loans are indexed at the Consumer Price Index rate. Increasing levels of outstanding student loan debt are an issue in both countries. Outstanding HELP debt in Australia was estimated at A$22.3 billion at 30 June 2013, while in New Zealand the outstanding debt amount was NZ$13.0 billion at 30 June 2012. Unlike Australia, New Zealand requires debtors who move overseas to continue loan repayments, however overseas-based borrowers are estimated to be responsible for over 80 per cent of the debt currently in default. While both countries are making changes which will bring their arrangements closer, in general New Zealand provides better access to Australian students than Australia does to New Zealanders. This is an ongoing issue for New Zealanders resident in Australia.