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Student Loans and Allowances: 2006
Embargoed until 10:45am  –  28 February 2008
Commentary

Student loans and allowances: background

Statistics New Zealand’s integrated data on student loans and allowances links educational information from the Ministry of Education with borrowing and allowance information from the Ministry of Social Development (StudyLink) and income and repayments information from Inland Revenue. It allows the educational characteristics of student loan borrowers and student allowance recipients to be linked with the details of their loans, allowances and income.

This release supplements information in the Annual Report on the Student Loan Scheme incorporating the Financial Statements to 30 June, published by the Ministry of Education in December 2007 available at http://www.educationcounts.govt.nz/publications/series/student_loan_scheme_annual_reports/17229.

Statistics New Zealand links new data supplied annually from the Ministry of Education, StudyLink and Inland Revenue to take advantage of improvements in data quality. This means that all data in previous releases has been revised.

In addition to this release, Statistics New Zealand will publish in 2008 four reports on the following topics:

  • iwi
  • regional information
  • income
  • completion of qualifications.

These will recommend whether further statistics can be produced on each of the topics. It is intended that any recommendations for new statistics from these reports will be incorporated in the next annual Student Loans and Allowances release.

Time periods covered by this release

The aim of this release is to provide statistics from the earliest point at which information is available. Due to the nature and sources of data available, some statistics commence from different years:

1992 – Leaving debt, debt five years post-study and full repayment information is available for those who left study from 1992 onwards.
1995 – Income information is only available for those who left study from 1995 onwards.
1997 – Information on ethnicity, field of study, level of study and provider type is only available from 1997 onwards.
2000 – The amount borrowed or received in a particular calendar year is only available from 2000 onwards.

The most recent data available for this release is for 2006. This reflects the time required to include income data for salary and wage earners and for those who are self-employed.

Average debt in this release refers to the average student loan debt and results from borrowing under the Student Loan Scheme. It does not include bank overdrafts, personal bank loans, loans from parents and family, credit card or hire purchases. 

Borrowing and leaving debt

Borrowing and borrowers increase

The number of students borrowing in a year under the Student Loan Scheme reached a high of 167,400 in 2006. The 8 percent increase from 154,404 in 2005 is the biggest percentage increase in the total number of borrowers since 2001. This is despite a 3 percent drop in total enrolments from 527,211 in 2005 to 512,694 in 2006.

The average total amount borrowed in a year by students has increased gradually over time, with the biggest annual increase between 2005 and 2006 (up 3 percent) from $6,410 in 2005 to $6,610 in 2006.

The overall average student loan leaving debt reached a high of $15,590 in 2005 (up 6 percent) from $14,730 in 2004. This continues the upward trend in average student loan leaving debt recorded since 1992, as shown in the graph below. 

Graph, Average Student Loan Leaving Debt.

More female borrowers but males borrow more

For every year from 2000, there were more female borrowers than male borrowers (60 percent females and 40 percent males in 2006). This trend is consistent with the composition of the student population with more females enrolling in tertiary education every year from 2000. Specifically, female borrowers consistently outnumbered male borrowers in all levels of borrowing under $15,000 (between 56 percent and 61 percent of borrowers borrowing under $15,000 were female between 2000 and 2006).

Although there are more female borrowers, males borrowed more, on average, than females for every year from 2000. In 2006 males borrowed an average of 10 percent more than females. This compared to the high recorded in 2003 when males borrowed an average of 17 percent more than females. 

The percentage of both males and females borrowing more than $10,000 in a year was highest in 2006. This continues the annual increase recorded since 2000 when 16 percent of males and 14 percent of females borrowed more than $10,000, compared with 25 percent of males and 21 percent of females in 2006.

Graph, Student Loan Borrowed in 2006.

The percentage of both males and females borrowing less than $5,000 in a year was lower in 2006 compared with all other years. Before 2006, around 47 percent of females and 41 percent of males borrowed less than $5,000 in a year. In 2006, these figures dropped to 43 percent (females) and 38 percent (males).

In 2005, average male leaving debt was 14 percent higher ($16,860) than the average female leaving debt ($14,730).

Amount borrowed in a year highest for those aged 60 years and over

In 2006, for the second consecutive year, the age group with the highest average amount borrowed in a year was the 60 years and over age group ($9,190). This was a 14 percent increase from $8,040 in 2005. While those aged 60 years and over borrowed the highest average amount in 2006, they constitute a very small group of borrowers (2 percent of all borrowers). 

Between 2005 and 2006, the average amount borrowed in a year by those aged 55–59 years increased by 15 percent (from $5,500 in 2005 to $6,320 in 2006).

The distribution of borrowers by age group continued to shift toward older borrowers, with those aged 40 years and over making up 14 percent of borrowers in 2006. This compared with the same age group making up 13 percent of borrowers in 2005 and 10 percent of borrowers in 2000.

Most borrowers under 25 years of age

For every year since 2000, the largest percentage of borrowers were aged under 25 years (between 59 percent and 62 percent). Specifically, the biggest proportion of borrowers were aged 20–24 years, at around 36 percent of all borrowers for each year up to and including 2006.

Ethnic composition of borrowers' leaving cohorts

Sixty-three percent of borrowers in the 2005 leaving cohort identified as European, 26 percent as Māori, 10 percent as Pacific peoples and 12 percent as Asian (5 percent identified with other ethnic groups). Over time there has been a shift in the composition of the leaving cohorts. The most noticeable shift is in the percentage of borrowers identifying as Māori, which increased from 20 percent in 2001, up to 26 percent in 2005, and those who identified as European, which decreased from 70 percent to 63 percent.

Proportion of Borrowers by Ethnicity(1)
By year of leaving study, 2001–2005

   2001  2002  2003  2004  2005
 European  70  66  67  64  63
 Māori  20  24  22  24  26
 Pacific peoples  8  8  9  9  10
 Asian  10  10  11  11  12
 Other ethnic groups  5  6  7  6  5
 Not elsewhere included  1  1  1  1  1

(1) People can give more than one response for this variable.

Note: Unprioritised data is consistently available from all sources from 2001. See technical notes for further ethnic group information and table 5 in the tables section for counts.

Loans and allowances

Graph, Students with Loans and/or Allowances.

Increasing number of students receive loan and/or allowance

The number of students that received a loan and/or allowance in a year increased by 7 percent, from 164,526 in 2005 to 176,502 in 2006. This contributed to the overall 25 percent increase in students using the financial support system for tertiary education between 2000 and 2006.

Number of loan-only students increases

In 2006, about 7 in every 10 borrowers received only a loan and did not receive an allowance. This was slightly higher than all other years with the proportion of loan-only students rising from 62 percent in 2001 to 71 percent in 2006.

Total number of allowance students rises for first time since 2002

The total number of students receiving an allowance (58,194) rose 5 percent in 2006 from 55,554 in 2005. This is the first increase in the number of students receiving an allowance since 2002. The average amount received increased 3 percent to $6,580 in 2006 from $6,380 in 2005.

Number of allowance-only students falls 10 percent between 2005 and 2006

The number of students that received only an allowance (and no loan) in 2006 was the lowest since 2000, declining from 10,125 in 2005 to 9,102 in 2006 (down 10 percent). This decrease occurred every year with the exception of 2002 where there was a slight increase in the number of allowance-only students.

Loan and allowance students up 8 percent from 2005 to 2006

The number of students that received a loan and an allowance increased 8 percent (from 45,429 in 2005 to 49,092 in 2006). This is different to previous years where the number of students that received both a loan and an allowance declined each year, from 56,274 in 2001 to 45,429 in 2005. 

The average amount borrowed increased each year between 2000 and 2006 except for 2004. The average allowance received increased each year between 2000 and 2006 except for 2001. For those who received a loan and an allowance in 2006, the average allowance received was $6,720 and the average amount borrowed was $5,980. This is a 3 percent increase, on average, for both amounts borrowed and received for 2005 (average received was $6,530 and the average amount borrowed was $5,810).

Increased borrowing for course fees and living costs

The average amount borrowed for course fees by students per year was highest in 2006 ($4,410). This is 4 percent higher than in 2005 ($4,250), and 15 percent higher than in 2000 ($3,820).

The average amount borrowed for living costs per year increased by 13 percent between 2000 and 2006 ($3,410 in 2000 to $3,850 in 2006). However, the increase between 2005 and 2006 was only 1 percent ($3,830 in 2005 to $3,850 in 2006). The average borrowing for course-related costs remained steady over the same period at just under the $1,000 maximum available.

Repayments

Proportion of debt repaid within five years

The proportion of debt repaid within five years of leaving study has decreased over time. Borrowers who left study in 1997 had paid off, on average, 27 percent of their loan five years later. Borrowers who left study in 2001 had paid off, on average, 21 percent of their loan five years after leaving study.

Male and female proportional repayments similar

Male and female borrowers who left study in 2001 repaid similar proportions of their leaving debt five years post-study, at 21 percent for males and 22 percent for females. This is consistent with those who left study between 1997 and 2000. Even though the average income for males is higher than for females, males’ leaving debt is also higher on average.

Borrowing uptake by provider type

The proportion of students that left study with debt varied by provider type. Thirty-nine percent of those that left university in 2001 had student loan debt. This was followed by those that left colleges of education (31 percent), institutes of technology/polytechnics (28 percent), wānanga and private training establishments (PTEs) (27 percent), and other tertiary education providers (OTEPs) (18 percent).

These proportions by provider type changed for students that left study in 2005: for those that left university (up to 41 percent); colleges of education (up to 45 percent); institutes of technology/polytechnics (down to 17 percent); wānanga and OTEPs (down to 12 percent). This is during a time of increase in the number of enrolments at institutes of technology/polytechnics, wānanga and OTEPs.
Note: For definitions of individual provider types, see the technical notes.

Graph, Percentage of Student Loan Leaving Debt Repaid Five Years Post-study.

Repayment by provider type

Repayment rates within five years of leaving study varied by provider type. Wānanga students who borrowed owed more in 2006, five years after they left study, than they did on leaving study in 2001. Their average leaving debt in 2001 was $10,930, but by 2006 this had increased 1 percent, to $11,040. In comparison, students who left colleges of education in 2001 had repaid 30 percent of their student loan debt after five years, the highest proportion for all provider types ($14,410 in 2001 down to $10,080 in 2006).

The number of borrowers that left wānanga in 2001 was smaller than that from other tertiary institutions, at 693 students compared with 15,942 borrowers leaving university. By 2005 however, the number of borrowers that left wānanga increased to 4,230, which was 12 percent of all students that left wānanga in 2005 (24,939 leaving university). Repayment rates for borrowers that left wānanga have consistently remained the lowest of all provider types, making little or no progress within five years of leaving study. The majority of borrowers who left wānanga studied level 1–3 certificates (67 percent for those who left study in 2001, 70 percent for those who left study in 2005).

A shift in the ethnic composition of borrowers at wānanga occurred for those that left study between 2001 and 2005. In 2001, 93 percent of borrowers who left study at wānanga identified as Māori. Due to the increased numbers of other ethnic groups that have left wānanga, this proportion has declined to 66 percent of borrowers in 2005.

Repayments for borrowers aged 60 years and over

The 60 years and over age group was the only other group whose student loan debt five years post-study was higher than their student loan leaving debt (an average leaving debt of $9,230 in 2001 compared with $9,880 five years later). However, the number of borrowers in this group was the smallest of all the age groups, with 267 leaving study in 2001. 

Repayment by ethnicity

Pacific peoples and European borrowers both had high average student loan leaving debts in 2001 ($13,870 for Pacific peoples and $13,230 for European borrowers). However, by 2006 a large repayment discrepancy had appeared. European borrowers who left study in 2001 had repaid 26 percent of their student loan by 2006 (the highest percentage for all ethnicities) while Pacific peoples repaid only 4 percent (the lowest for all ethnicities).

Consequently, Pacific peoples who left study in 2001 had the highest average student loan debt five years post-study ($13,310). This was 6 percent higher than the average student loan debt five years post-study for Pacific peoples who left study in 2000, and was 30 percent higher than the average student loan debt five years post-study for Pacific peoples who left study in 1997. The majority of Pacific peoples borrowers (72 percent) who left in 2001 studied at institutes of technology/polytechnics (ITPs) and private training establishments (PTEs).

The proportion of student loan debt repaid within a five-year period of leaving study has decreased for all ethnic groups who left study between 1997 and 2001. Asian borrowers who left study in 1997 had paid off 31 percent of their student loan debt by 2002, compared with 20 percent by 2006 for those who left study in 2001. The 2006 figure however, is a 2 percentage point increase from 2005 for those Asian borrowers who left study in 2000 (18 percent repaid).

Average Debt by Ethnicity
For students who left study in 2001

   Average debt ($)  Percentage change
 Leaving debt in 2001  Debt in 2006
 European  13,230  9,840  -26
 Māori  11,380  10,270  -10
 Pacific peoples  13,870  13,310  -4
 Asian  12,690  10,180  -20
 Total  12,800  10,070  -21

Note: Amounts in this table have been rounded to the nearest $10.

Graph, Percentage of Student Loan Debt Repaid Five Years Post-study.

Full repayment

Graph, Full Repayment of Student Loan Debt.

Plateau in students who fully repaid their loans at time of leaving study since 1997

Since 1997 the proportion of all borrowers who had fully repaid their student loan debt at the time of leaving study remained relatively steady (between 6 percent and 7 percent), and there is no noticeable change in behaviour from 2001 when the zero interest while studying policy was introduced.

Similar proportion fully repaying loan within five years of leaving study

Just over a third of borrowers (35 percent) who left study in 2001 had fully repaid their student loan five years later in 2006 (15,180 of 43,950 borrowers). This is consistent with borrowers who left study each year between 1996 and 2000.

The proportion of students who fully repaid their student loan within five years of leaving study was slightly higher for females (up to 4 percentage points higher).

Income

This section only refers to the New Zealand taxable income of those students who borrowed under the Student Loan Scheme and/or received an allowance.

Gap between male and female income

For those who left study in 2001, male average income five years post-study was 17 percent higher than for females. This difference is almost identical to the previous five years with the exception of those who left in 2000, where the average five-year post-study income was 21 percent higher for males than females.

Note that income information does not distinguish between those who completed their qualification from those who did not, or hours worked by males and females.

Graph, Average Income Post-study.

Males’ five-year post-study income higher in all fields of study

Across all fields of study, the average five-year post-study income for males who left study in 2001 was notably higher than for females (ranging from 7 percent higher for those that left agriculture, environmental and related studies qualifications to 45 percent higher for those that left health qualifications). Males who left study in 2001 had a higher average income one year post-study than females in all fields of study except in creative arts. Males also had a greater proportional increase in average income within five years of leaving study in all fields of study.

Note: Fields of study referred to in this section are broadly defined. For example, health includes nursing, medicine, dentistry and a range of related fields.

Graph, Average Income for Students who Left Study in 2001.

Income by field of study, level of study and sex

For the first time, this release contains statistics that look at income differences between males and females by field of study, highlighting the proportion of borrowers who studied at level 7 bachelors or above.

Proportion of Borrowers Leaving Study at Level 7 Bachelors or Above in 2001
By field of study and sex

 

Males

Females

Total

Natural and physical sciences

 94

 89

91

Information technology

 19

 11

16

Engineering and related technologies

 19

 33

21

Architecture and building

 15

 34

19

Agriculture, environmental and related studies

 20

 27

22

Health

78

73

74

Education

81

76

77

Management and commerce

54

30

39

Society and culture

40

54

48

Creative arts

31

39

35

Food, hospitality and personal services

0

0

0

Mixed field programmes

39

32

35

Not elsewhere included

16

17

17

Note: These figures do not distinguish those who completed from those who did not.

Management and commerce

For those who left management and commerce qualifications in 2001, the average income for males increased by 56 percent, from $27,480 in 2002 to $42,750 in 2006. For females the average income increased by 39 percent, from $23,440 in 2002 to $32,560 in 2006. This difference between male and female income can be partly attributed to the higher proportion of males studying management and commerce qualifications at level 7 bachelors or above (54 percent of males and 30 percent of females who left in 2001).

Society and culture

There was also a difference in the proportion of males and females who studied society and culture qualifications at level 7 bachelors or above, with 40 percent of males and 54 percent of females. However, males still earned 8 percent more on average than females five years post-study for those who left in 2001 ($33,260 for males and $30,850 for females).

Natural and physical sciences

Ninety-one percent of students who left natural and physical sciences qualifications in 2001 had studied at level 7 bachelors or above. This is the highest percentage for all fields of study.

The biggest increase between one and five years post-study income was 58 percent for those who left natural and physical sciences qualifications, and architecture and building qualifications in 2001. For those who left natural and physical sciences qualifications in 2001 their income increased from $25,460 in 2002 (one year post-study) to $40,290 in 2006 (five years post-study).

Males who left natural and physical sciences qualifications in 2001 earned an average of 21 percent more than females, five years post-study ($43,680 for males and $35,980 for females).

Architecture and building

While experiencing the same proportional increase as those who studied natural and physical sciences qualifications, the average income one and five years post-study for people leaving architecture and building qualifications were much lower, at $21,740 in 2002 (one year post-study) to $34,340 in 2006 (five years post-study) for those who left study in 2001.

Only 19 percent of students who left architecture and building qualifications in 2001 studied at level 7 bachelors or above.

Health

The highest average one and five years post-study income for both males and females that left in 2001 was for those who left health qualifications. The average five-year post-study income for males who left health qualifications in 2001 was $55,560. While high, this is 10 percent lower than the average five-year post-study income for males who left health qualifications in 2000 ($62,030). 

The biggest proportional gap between male and female average five-year post-study income for those who left study in 2001, was 45 percent for those who left health qualifications ($55,560 for males and $38,350 for females). This compares with a difference of 68 percent in five-year post-study income for those who left study in 2000 ($62,030 for males and $36,880 for females). There were similar proportions of male and female borrowers leaving health qualifications at level 7 bachelors or above in 2001 (78 percent for males and 73 percent for females).

Creative arts

For those who left study in 2001 from creative arts qualifications, the one year post-study income was 3 percent higher for females than for males ($19,310 for males and $19,880 for females). This was the only field where the average male one year post-study income was lower than for females. For this same group five years later (2006) male income was 11 percent higher than female income ($30,900 for males and $27,840 for females).

Income comparison for level 7 bachelors qualifications 

Graph, Average Income Five Years Post-Study.

The highest average income five years post-study of $50,420 was for those who left engineering and related technologies qualifications at level 7 bachelors only in 2001. Students who left creative arts qualifications at level 7 bachelors only in 2001 had the lowest average income of $31,490 five years post-study.

For definitions please refer to the glossary in the technical notes of this Hot Off The Press.

For technical information contact: 
Guido Stark 
Wellington 04 931 4749
Email: info@stats.govt.nz  

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