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Student Loans and Allowances: 2005
Embargoed until 10:45am  –  03 April 2007
Technical notes

Key official statistics

This release includes official statistics on:

  • borrowing in a year
  • allowance received in a year
  • leaving debt
  • income after leaving study
  • loan balance for those living overseas or for those living in New Zealand
  • borrowers who have repaid their loan in full.

New this year

The following information is available for the first time in this release:

  • statistics for students who receive an allowances
  • statistics on income for students who have left study are available for those who had borrowed or received an allowance
  • statistics presented as time series.

Glossary

Economic variables

Amount Borrowed / Amount Received: This is the amount borrowed or received by a student in a particular calendar year (this is not the total amount borrowed by the student over all years of study).

Leaving debt: This is the total debt still owing in March following the last year of study, including any repayment the student may have made during study. This includes those who had $0 debt on leaving. For example, if a student last studied in 2000, their leaving debt is their debt in March of 2001. This data will always be a year behind the release date. For example, leaving debt data is only available for those who left study up to 2004 and did not return the following year in the 2005 dataset on Student Loans and Allowances.

Debt five years post-study: This is the total debt still owing in March five years after the last year of study, including any repayment made up to this time. This includes those who had $0 debt five years post-study. For example, for those who last studied in 2000, their debt five years post-study is their debt remaining in March 2006.

Income one year post-study: This is the taxable income earned in the tax year after leaving study. This excludes those with $0 income. For example for those students who left study in 2000, their one year post-study income is in the 2001–2002 tax year.

Income five years post-study: This is the taxable income earned in the tax year five years after leaving study. This excludes those with $0 income. For example for those students who left study in 2000, their five year post-study income is in the 2005–2006 tax year.

Demographic characteristics

Age group: the person's age at 1 July in the reference year in the table.

Ethnic group: data for the years before 2000 are sourced from the Ministry of Education, and assign each individual to one ethnic group only. For those who identified with more than one ethnic group this allocation was based on the following order of priority: Māori, Pacific peoples, Asian, Other, European. For example, if a student loan borrower identified as both Samoan and European, then they were assigned to the Pacific peoples ethnic group. Subsequently, unprioritised ethnicity data began to become available, from StudyLink (from 2000 onwards) and the MoE (from 2001 onwards), and where available this unprioritised ethnicity data has been used. The data from both sources may include up to three ethnicities for each individual, meaning that figures relating to 2000 may reflect identification with as many as three different ethnic groups per student, and those from 2001 as many as six different ethnic groups per student.

From 2001 onwards, unprioritised ethnicity data are available for nearly all borrowers. In a small number of cases, where unprioritised ethnicity data are not available, the older prioritised MoE ethnicity data have been used. The change from prioritised to unprioritised ethnicity data will affect ethnic group comparisons between the tables relating to borrowers in 1997 and 2005. Tables spanning the 1997 to 2005 period will reflect a combination of prioritised and unprioritised ethnicity data.

Declared overseas: includes people who advised Inland Revenue they were living overseas or were departing to live overseas during the reference year. There will be additional holders of student loans who were overseas and had not advised Inland Revenue, but this figure cannot be accurately quantified.

Study-related variables

Level of study: the qualification(s) for which the student was enrolled. This does not distinguish those who completed their qualification from those who did not. A student can be enrolled in more than one level of study, therefore they can be counted in more than one level in the table.

Field of study: the New Zealand Standard Classification of Education of the field(s) of study or subject of a programme of study in which the student was enrolled. A student can be enrolled in more than one field of study, therefore they can be counted in more than one field in the table. Field of study includes all levels of study, and does not distinguish those who completed their qualification from those who did not.

Provider type: the type of provider at which the student was enrolled. A student can be enrolled in more than one provider type, therefore they can be counted in more than one provider type in the table. This does not distinguish those who completed their qualification from those who did not.

Leaving year: This is the last year of study of a student, and does not distinguish those who completed their qualification from those who did not. For example, if a student last studies in 2000, then the student is considered to have left study in 2000 and their leaving year is 2000.

Field of study, level and provider type during the student's last year of study were assigned to their debt, income and repayment.

Integrated dataset

The statistics in this release have been produced using a database of student loans and allowances, and tertiary education data held by Statistics New Zealand. One of the important components of the database is an integrated dataset on student loan borrowers and allowance recipients. This dataset was created by linking administrative records from a number of government agencies:

  • individual students’ tertiary enrolment data from the Ministry of Education (MoE)
  • individual students’ borrowing data from the now-defunct Student Loan Account Manager (SLAM) provided by Inland Revenue and the MoE
  • individual students’ borrowing and allowance data (from 1999 onwards for allowances, and 2000 onwards for loans) from StudyLink, a service of the Ministry of Social Development (MSD)
  • individuals’ repayment and income data from Inland Revenue.

The integrated dataset contains data on the loans of students who borrowed under the Student Loan Scheme. It has recently been updated to include data for 2005, and this Hot Off The Press provides the first release of results following the update with the statistics focusing on the characteristics of student loan borrowers and allowance recipients, and how these relate to borrowing levels, allowances received, leaving debt, income and repayments.

The 2005 data presented in this HOTP is based on linking new data supplies from agencies to Statistics NZ to take advantage of improvement in data quality. This means all previous data has been revised.

The integrated dataset is the only data source that links information on borrowers and allowance recipients' income, debt and repayment with their enrolment details and other characteristics. It includes information on borrowing and allowances, and has the ability to link records over time, thus enhancing its usefulness as a single integrated data source from which to provide statistics for strategic policy and financial analysis.

History of the dataset

The Student Loan Scheme began in 1992. In June 2000, the Auditor-General released a report entitled Student Loan Scheme – Publicly Available Accountability Information. The report proposed that Statistics New Zealand integrate selected datasets relating to the Student Loan Scheme with a view to providing statistics for strategic policy, financial risk management, financial reporting and forecasting. As a result of work undertaken to follow up the Auditor-General's report, Statistics New Zealand was directed to lead an investigation into the privacy, logistical and data issues around data integration. Other agencies involved in the exercise were the Ministry of Education, Inland Revenue, the Treasury, the then Department of Work and Income, and the then Ministry of Social Policy. The Privacy Commissioner was consulted over the privacy issues involved in integrating personal data from different sources.

In April 2002, Cabinet funded Statistics NZ to construct an integrated dataset on student loan borrowers dating back to 1997. Annual updates were also funded, with statistics to be released by Statistics NZ each year. Cabinet's approval for the work was given in the knowledge that the Privacy Commissioner was comfortable with the revised methodology proposed by Statistics New Zealand. During 2002, Statistics New Zealand established the first integrated dataset on student loan borrowers, containing data on students who borrowed in any of the years 1997 to 2000. The first release of data from this new integrated dataset occurred in December 2002. A second release was issued in November 2004, when the dataset was updated to include data on students who borrowed in 2001 and 2002. A third release was issued in November 2005, when the dataset was updated to include data on students who borrowed in 2003. A fourth release was issued in April 2006 to include data on students who borrowed in any of the years 1997–2004.

Further work was undertaken in 2006–2007 to include allowance recipients into the integrated dataset, and the name was changed to Student Loan and Allowances. The focus on the HOTP shifted to producing statistics on borrowing and allowances in a particular year, leaving debt, debt five years post-study, income one and five years post-study and full repayment for all those who borrowed or had an allowance from 1992 onwards and these statistics are available for the first time in this current release.

Due to the shift in concepts reported, the new data supplied by source agencies and the complete reintegration of this data, the statistics produced in this release are not comparable to previous releases in 2002, 2004, 2005 and 2006.

Matching methodology

The integrated dataset was created in two stages. The first stage merged the records of Inland Revenue and MSD (or SLAM) using tax file numbers. The second stage used a probabilistic matching methodology to match the MoE data to the already linked 'loans' dataset created in the first stage. Variables used in this second stage were: student identification number; tertiary institution number; year of study/borrowing; sex; day, month and year of birth; surname; first initial of first name; and ethnicity. Probabilistic matching allows records to be linked when some of the matching variables are not unique, have incorrect values, or are missing.

The overall link rate for the integrated dataset, after both exact and probabilistic matching was completed, was 94 percent. There was considerable variation in the link rate over the years, due in most part to the lack of education data for students at private training establishments (PTEs) before 2000. For 1997 to 1999, the average link rate was 90 percent, and for 2000 to 2004, the average link rate was 97 percent.

It is important to note that when Statistics NZ is satisfied that all checking has been completed, unique identifiers are not carried through to the integrated dataset. Annual updating of the integrated dataset is achieved through the use of a non-reversible algorithm. Statistics NZ runs the algorithm against the unique identifiers to produce a new linking identifier for each unit record. It is this new variable that enables each year's data to be added to the integrated dataset.

Further information on the matching methodology can be found in two methodological reports published on Statistics New Zealand's website (see www.stats.govt.nz/browse_for_stats/education_and_training/Tertiary education/student-loan-data-integration-project).

Differences between all student loan borrowers and those in this release

Users should be aware that official statistics on student loans are also published in the annual report of the Student Loan Scheme, jointly published each year by the MoE, Inland Revenue and the MSD, and various other topical reports by the MoE. The official statistics on student loan borrowers included in this Hot Off The Press may differ from statistics published in the annual report. This is because the source administrative data was provided to Statistics New Zealand at a specified cut-off date which differs from the one used for the compilation of the annual report. In addition, the tables in this Hot Off The Press use different populations from those in the annual report, and different concepts for those populations.

For example, the data on leaving debt produced by Statistics New Zealand includes those who leave study with $0 leaving debt (having repaid their loan while studying), whereas reports by the MoE at times exclude those who leave with $0 debt.

The use of probabilistic matching significantly increased the percentage of student loan borrowers whose information was included in the integrated dataset. However, it should be noted that some types of student loan borrowers were still under represented, even after both stages of matching were completed. Due to the absence of data from the MoE's dataset on students attending PTEs before 2000, the link rate of PTE students prior to 2000 was around 30 percent. From 2000 onwards, the link rate rose to around 91 percent.

Student loan and tertiary education data held by Statistics New Zealand

Statistics New Zealand's student loan and tertiary education database has several components:

  • the integrated dataset (ie matched data for students who had loans in any of the years 1997–2005)
  • Inland Revenue information for 1992–2005 for student loan borrowers whose records were not matched
  • Ministry of Social Development information for 2000–2005 for student loan borrowers whose records were not matched
  • MoE enrolment data for all formal students from 1997–2005, regardless of whether they were student loan borrowers. A formal student is one who is enrolled in a formal programme of study at a tertiary education provider for more than one full-time week
  • SLAM information for students who borrowed in or before 2000. SLAM data was provided by both the MoE and Inland Revenue.

Several of these components are updated each year. Data on other tertiary education issues may be added to the database in the future.

The statistical tables included with this release are just examples of data that can be produced from the database. Customised requests can be run by Statistics New Zealand and, on application, researchers may be able to access unidentified data in Statistics New Zealand's Data Laboratory.

Reliability of the data

Statistics NZ has made every attempt to minimise errors in the student loan and tertiary education database, but two types of error will have occurred: errors in source data and errors due to record linking. Statistics NZ validated source data as it was received from each agency. If errors were detected, agencies were asked to rerun their data and provide it again. There will still, however, be some errors in the source data supplied.

Omissions in the original collection of information and errors in data entry and processing will have occurred. These cannot be quantified. In terms of errors in record linking, Statistics New Zealand used sound probabilistic matching methodology, but errors will still be present. For example, over all years an average of 7 percent of loan records were not linked to a MoE record, with considerable improvement from 2000 onwards. There will be some cases where an Inland Revenue record has been linked to the wrong MoE record, but this is estimated as affecting fewer than 1 percent of the links.

Supplementary table information

Table 1. Amount borrowed, distribution of borrowing for 2000 and 2005 by characteristics, for people who borrowed in 2000 and 2005.

Table 2. Leaving debt, distribution of leaving debt for 1997 and 2004 by characteristics, for those who left study in 1997 and 2004.

Table 3. Student Loans and Allowances, times series of borrowers and allowance recipients from 2000 to 2005 by characteristics for those who borrowed or received an allowance in any year 2000 to 2005. Includes number of borrowers and allowance recipients, average and median figures. Figures are provided for the following subgroups:

A. People who studied and borrowed only.
B. People who studied and received an allowance only.
C. People who studied AND borrowed AND received an allowance.
D. People who studied AND borrowed OR received an allowance.

Table 4. Debt and Income, by characteristics shown for year of leaving study. Includes leaving debt, debt five years post-study, income one year post-study and income five years post-study.

  • Leaving debt figures are available for students who left from 1992 to 2004.
  • Debt five years post-study is available for student who left from 1992 to 2000.
  • Income one year post-study is available for students who left from 1995 to 2004.
  • Income five years post-study is available for student who left from 1992 to 2000.

Table 5. Overseas vs. New Zealand level of debt, by characteristics. Includes time series for the number of borrowers, and the average and median debt for those who borrowed in any year 1997 to 2004 and are resident overseas or in New Zealand.

Table 6. Full repayment, at point of leaving study and five years post-study for student who left , by characteristics. Includes time series for the number of students who had fully repaid their debt at the point of leaving study, and five years post-study.

Full repayment at point of leaving study information is available for student who left from 1992 to 2004.

Full repayment five years post study information is available for students who left from 1992 to 2000.

See List of supplementary tables for more details.

Policy list

Here is a list of recent Government policies that relate to student loans and allowances.

 Date  Policy
1 April each year Parental income thresholds will be adjusted annually for inflation (with the initial adjustment for inflation occurring on 1 April 2005).
1 April each year Student Allowance rates are reviewed.
1 January each year

Accommodation Benefit rates are reviewed.

1989 Income-tested student allowances were introduced to help people from low-income families meet their living costs while they studied, replacing the former tertiary grants scheme.
1992

Student Loan Scheme began. Students could draw down total amount including fee costs, in one lump sum at beginning of study. This was later changed to pay fee costs direct to tertiary providers, and only pay the living costs fortnightly.

The age at which eligibility for student allowances was subject to a parental income test was increased from 20 to 25 years.

A maximum amount of $1,000 was imposed on how much a student loan borrower could borrow for course-related expenses.

1994 Data has been supplied electronically at a unit record level by public tertiary education institutions since 1994, but by PTEs only since 2000.
1992–1997 Student loans managed by the Student Loan Account Manager (SLAM) and Inland Revenue. Previously named SLM (Student Loan Management).
Since 1997 MOE data available electronically.
1998–2000 The average tuition fee of equivalent full-time student (EFTS) in public tertiary education institutions increased by 29 percent between 1998 and 2000. This was a reflection of the reduction in funding rates during this period.
1999 Administration of student allowance transferred from the Ministry of Education to the student services division of the Department of Work and Income – which was subsequently renamed StudyLink and absorbed into the Ministry of Social Development.
 
2000  

The maximum amount that a student loan borrower could borrow for course-related expenses was increased to $1,000.

Interest free while in study for full-time, full-year study and part-time, part-year study earning under an income threshold ($24,596 in 2001 tax year – 2000 academic year).

Since 2000 The management of the Student Loan Scheme was shifted from the Student Loan Account Manager (SLAM) to the StudyLink division in the Ministry of Social   Development.
Since 2001

Fee stabilisation policy implemented. This is part of the Government’s commitment to help keep tertiary education affordable for students.

The move to zero or reduced fees in some providers, especially in polytechnics and wānanga.

2001–2003 The Government’s fee stabilisation policy helped contribute to the average tuition fee per equivalent full-time student in public tertiary education institutions falling by 24 percent.
Since 2004 The fee/course cost maxima (FCCM) policy replaced the fee stabilisation policy.
2005 budget The sixth-year medical students’ trainee medical intern grant was increased by $10,000. This will reduce the student loan borrowing by providing a living allowance for all sixth-year medical students.
2005 budget Bonded, merit-based scholarships for New Zealand’s most academically capable students were introduced.
2005 Step Up scholarships introduced to provide fees support for students who study in some fields of study at certain levels and who meet age-related and income criteria.
21 January 2005

The lower student allowance parental income threshold was raised from $28,080 to $33,696.

For students living away from home, the lower student allowance parental income threshold was raised from $50,752 to $62,148.

Parental income limits were adjusted annually in line with the CPI from 1 January 2005.

 
From 1 January 2005 Part-time, part-year students studying a course load of 0.3 equivalent full-time student (EFTS) units or more can apply for a student loan for their tuition fees. The government is allowing student s studying between 0.25 and 0.3 EFTS and enrolled in a course that meets vocational conditions and be in employment or studying for a qualification that lead to employment to access student loans for tuition fees from 1 January 2005.

The $6,500 cap on Student Loan Scheme tuition fee borrowing at private training establishments was removed. Instead, students’ tuition fee borrowing entitlement will be limited to the amount charged by the provider or the relevant fee maximum, whichever is the lesser.
From 1 January 2006 Personal and joint income thresholds for student allowances were increased. Previously students whose earnings were over the income limit were not eligible for a student allowance, whereas now the allowances entitlement will be reduced/ abated by one dollar for every dollar earned over the income limit.

The student allowance parental income threshold adjustment for families with more than one student and introducing a student allowance parental income threshold adjustment for separated parents was increased.
 
From 1 April 2006

Student loan borrowers living in New Zealand for 183 or more consecutive days (about 6 months) are exempted from paying interest on their loans. During that 183-day qualifying period, borrowers can go overseas for up to 31 days in total and still be eligible for an interest free student loan.

A borrower can be absent from New Zealand for up to 183 days and still retain interest free status. The 31 day rule only applies if a borrower has been out of New Zealand for 184 or more consecutive days and is in a qualifying 183 day period back in New Zealand. If the borrower left New Zealand for more than 31 days during this qualifying period, then a new 183 day qualifying period would start on their return to New Zealand.

Exemptions can be applied for by borrowers in certain circumstances:

1. Unexpected delay returning to New Zealand

2. Unplanned absence

3. Employment or occupational absence

4. Government service overseas

5. Voluntary or working for token payment with a charitable organisation

6. Post-graduate study

Borrowers who are overseas because their partner is affected by 3–6 can also be exempted and have their loan remain interest free.

From 1 April 06 to 31 March 07

An amnesty on student loan late payment penalties administered by Inland Revenue.

A borrower is eligible for the amnesty if:

  • Non-resident for tax purposes on 31 March 2006, and have student loan arrears and penalties at the start of the amnesty period (1 April 2006), or
  • Overseas on 31 March 2006, but haven't advised IR that they have left, and have student loan non-resident arrears and penalties, when they correct residency status is established.
30 November 2006

Refund policy introduced – repayments made prior to 01/04/04, can no longer be refunded.

Excess repayments for the 2005 and 2006 tax periods refunded where hardship does not apply, will not be entitled to interest free write-off (that is the  increase in the loan balance as a result of a refund will subject to interest that will not be written off under the interest free policy).

Student loan interest rates, thresholds and due dates

 Student loan interest rates, thresholds and due dates
Year ended
31 March  
Interest
(percent)
Repayment
threshold
($)
2007 6.90 $17,160.00
2006 7.00 $16,588.00
2005 7.00 $16,172.00
2004 7.00 $15,964.00
2003 7.00 $15,496.00
2002 7.00 $15,132.00
2001 7.00 $14,768.00
2000 7.00 $14,716.00
1999 8.00 $14,716.00
1998 8.20 $14,560.00
1997 8.40 $14,300.00
1996 9.00 $13,884.00
1995 7.00 $13,520.00
1994 7.20 $13,104.00
1993 8.20 $12,670.00

Understating ethnic identification

Here is an example from the 2001 Census that shows the degree to which ethnic identification may be understated by the use of prioritised ethnicity data. The 2001 Census recorded ethnicity using a 'total response' approach, where an individual could identify with more than one ethnic group. Consequently, the total of all ethnicities collected is greater than the total population because up to six ethnicities were recorded for each individual.

Total response ethnicity data is sometimes referred to as 'unprioritised' ethnicity data, in contradistinction to 'prioritised' ethnicity data, which assigns each individual to one ethnic group only. Prior to 2000, data on student loan borrowers sourced from the MoE assigned students to one ethnic group only. Where a student identified with more than one ethnic group, this allocation was based on the following order of priority: Māori, Pacific peoples, Asian, Other, European. For example, if a person identified as both Samoan and European, then they were assigned to the Pacific peoples ethnic group. The integrated dataset on student loan borrowers is unusual in combining both prioritised and unprioritised ethnicity data, as described in these Technical notes. This is done for practical purposes, because prior to 2000 unprioritised ethnicity data was not available from the existing administrative data sources. Without using prioritised ethnicity data a large proportion of students who had borrowed in at least one year between 1997 and 2005 would have been recorded with unknown ethnicity.

The use of prioritised ethnicity data will tend to undercount the number of people in certain ethnic groups. The table below gives an example from the 2001 Census of the degree to which ethnicity is understated by prioritised ethnicity data. It shows the percentage by which the number of people identifying with each ethnic group is understated when individuals are assigned to one ethnic group only using the same order of priority applied in the pre-2000 student loan data.  

Percentage of ethnicities understated by prioritised ethnicity data

Order of
priority  
Ethnicity Age group (years)  
15 15–19 20–24 25–29 30–34 35–39 40–44 45+ Total
1 Māori 0 0 0 0 0 0 0 0 0
Asian 11 5 5 5 4 3 2 3 5
Other 14 8 8 6 3 5 4 4 8
European 24 17 15 12 9 7 6 3 10
Pacific peoples 30 19 14 9 6 6 6 3 16

The number of Māori is not understated at all, because Māori is the first ethnic category in order of priority. Yet Pacific peoples, the second in order of priority, is most understated (14 percent overall).

The table also shows that the number of younger people, particularly those under 25 years, tends to be understated more because they are more likely to identify with multiple ethnic groups.

This suggests that while results for Māori will be unaffected by the use of prioritised ethnicity data in the student loan dataset, in the earlier years (pre-2000) the number of people in other ethnic groups will be understated – particularly European and Pacific peoples in the younger age groups. Tables which span the 1997 to 2005 period and include a combination of prioritised and unprioritised ethnicity data are likely to be affected to a lesser extent.

Further information is available from the Statistics New Zealand website at: www.stats.govt.nz/browse_for_stats/population/census_counts/review-measurement-of-ethnicity/papers

More information

For more information, follow the link from the Technical notes of this release on the Statistics New Zealand website.

Copyright

Information obtained from Statistics NZ may be freely used, reproduced, or quoted unless otherwise specified. In all cases Statistics NZ must be acknowledged as the source.

Liability

While care has been used in processing, analysing and extracting information, Statistics NZ gives no warranty that the information supplied is free from error. Statistics NZ shall not be liable for any loss suffered through the use, directly or indirectly, of any information, product or service.

Timing

Timed statistical releases are delivered using postal and electronic services provided by third parties. Delivery of these releases may be delayed by circumstances outside the control of Statistics NZ. Statistics NZ accepts no responsibility for any such delays.

Next release

Student Loans and Allowances: 2006 will be released on 28 February 2008.

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