Student Loan Interest Raised
The interest rate applied to Student Loan balances was raised on the 23 of February.
According to media statements made by Revenue Minister Peter Dunne, as of the 1st of April 2009, the new rate will be 6.8%. The previous rate was 6.7%. Due to the fact that interest is written off for graduates staying in New Zealand, the change will only be felt by those with student loans who are working overseas or are out of New Zealand for more than 6 months.
The rate is set by taking a five year average of the government ten year bond’s yield, plus a small extra to cover the likes of administration costs associated with the loans. The long run average is used to ease the effect of spikes and short term troughs in the interest rate.