The Government has made good on its promise to introduce a repayment bonus on any voluntary student loan repayments, announcing that the scheme will come into effect this year.
From April 1st, all voluntary student loan repayments of over $500 will receive a 10% bonus repayment.
A $500 voluntary payment, for instance, would receive a $50 bonus repayment.
Also included in the announcement was an extension to include student loan borrowers overseas, which was not a part of the initial announcement made prior to last year’s General Election.
Minster for Tertiary Education Anne Tolley called the bonus scheme “more than generous.”
“This is because it includes overseas-based borrowers, it isn’t limited to repayments made 10 years after a person graduates and the $500 repayment doesn’t have to be made in one transaction,” said Mrs. Tolley.
“It will give student loan borrowers greater incentive to make voluntary repayments and help them repay loans faster. This means more money in their pockets each week and more freedom to make major life decisions.”
While the Government’s acknow-ledgement that student loan debt was an inhibiting factor in the lives of many New Zealanders, New Zealand University Students’ Association Co-President Sophia Blair said the bonus scheme was exclusive and benefited a fortunate financial few.
“Most borrowers who are already making considerable compulsory repayments each week, during what are tough economic times, are left out in the cold by this announcement,” Blair said.
“If National really cared about reducing repayment times they would open this bonus scheme up to all borrowers.”
“We question why National has created such a narrow policy that will merely reward the rich and leave everyone else to struggle,” she said.
Victoria University Students’ Association President Jasmine Freemantle was similarly glad to hear the Minister’s recognition of student debt, but felt that scope was limited in application.
“I think in many cases it’s not really about incentive or wanting to pay back a loan, but that it’s about having the facility to do so,” Freemantle said.
“For the vast majority of students, especially women, Pacific Island and Maori students who have the tendency to earn a significantly lesser income, it is unlikely that they will benefit from this.”
Freemantle also noted that there are “other avenues the Government could be taking to provide equitable student support services.”
The bonuses are calculated over the course of the financial year, and also include aggregate payments that add up to the $500 minimum.