Fewer students, bigger loans
More borrowers living overseas made repayments on their loans this year, up nearly 10 per cent from last year, but they remained the largest group of those with overdue repayments.
Fewer students took out student loans in the year to June 30, but they borrowed more on average, according to the scheme’s annual report.
Nearly 177,000 students borrowed an average amount of $9053 compared to the 182,500 that borrowed an average of $8888 each last year.
The increase was largely due to higher course-fees and living expenses, while course-related costs stayed nearly the same, according the report.
The total amount borrowed was $1.6 billion up from $1.5b the previous year.
People repaid $1.27b during the year, up $60 million.
More borrowers living overseas made repayments on their loans this year, up nearly 10 per cent from last year, but they remained the largest group with overdue repayments.
This group owed 76 per cent of outstanding loans, but accounted for just 15 per cent of borrowers on the scheme, almost unchanged from a year ago.
Overseas-based borrowers had a total of $1.1b in overdue repayments, while those living in New Zealand had $99.3m.
Overseas-based borrowers also had a higher balances, with 17 per cent owing more than $50,000 compared to 7.2 per cent of those living in New Zealand.
On average, those living in New Zealand take 6.8 years to pay off their loan, and those who spend time living overseas take 14.4 years.
But there was a 3 per cent reduction in overseas-based borrowers in default in 2017 compared with 2016.
The strong labour market has led to a steady decline in the number of those taking out loans since 2010.
Since 2010 the percentage of borrowers aged 26 years or younger has risen from 68 per cent to 74. The average student loan balance was $21,467.
Taking out a loan is ubiquitous among university students; of those eligible this year, 70 per cent did so.
Under half of those loans have been paid off to date, with 538,000 people having paid off their loan since the scheme began.
In a precursor to the Government’s policy granting first-year free of university fees there will be an increase in the living cost allowances and reduction in borrowing for for first-year fees.
From January 2018, student allowance rates will increase by $50.
The accommodation benefit is also slated to increase from $40 to $60 in 2018.