Stats NZ has a new website.

For new releases go to

www.stats.govt.nz

As we transition to our new site, you'll still find some Stats NZ information here on this archive site.

  • Share this page to Facebook
  • Share this page to Twitter
  • Share this page to Google+
Student Loans and Allowances: 2010
Embargoed until 10:45am  –  02 December 2011
Commentary

Overview

Student Loans and Allowances: 2010 looks at students who have made use of the Student Loan Scheme and Student Allowances, two forms of financial support available to eligible students participating in provider-based tertiary education. See Definitions section for more details.

The number of students that enrolled, borrowed a student loan, and received an allowance in 2010 can be seen in the diagram below.

Diagram, Student loan borrowers and allowance recipients, 2010.  

More student loan borrowers, but enrolments slightly down

The number of students who borrowed in a year through the student loan scheme increased by 6.9 percent in 2010 (up 13,746 on 2009), to reach 212,469 borrowers. This was the highest number of borrowers since the student loan scheme began and continues the upward trend which began in 2006.

Graph, student loan borrowers and participation rate in the student loan scheme, 2000 to 2010.

The total number of tertiary enrolments was 465,441 in 2010, a decrease of 0.6 percent from 2009 (down 2,685). This comes after enrolments were up in 2009 and down the previous three years.

The proportion of tertiary students participating in the student loan scheme in 2010 was 45.6 percent, up from 42.5 percent last year. This reflects the ongoing impact of the interest-free loans policy introduced in 2006. Not all students are eligible to borrow; the Ministry of Education estimates that 74 percent of those eligible to borrow in 2010 did so, up from 71 percent in 2009.

Just under two-thirds of all borrowers in 2010 were aged 24 years and under. Young students had the highest rates of borrowing of all age groups in 2010, with 63.6 percent (52,530) of enrolled students aged 20 years or less and 59.8 percent (80,232) of enrolled students aged 20–24 years accessing the student loan scheme.

Amount borrowed

The average amount borrowed by a student in 2010 was $7,300, up 4.4 percent on 2009 (up $310). This is the highest average amount borrowed on record and also the greatest annual percentage increase since the student loan scheme began. This was driven by an increase in the amount borrowed for course fees. On average, students borrowed $5,080 for course fees in 2010, an increase of 6.5 percent on 2009 (up $310). The average amount borrowed for both living and course-related costs remained relatively similar to those of 2009.

Graph, Average amount borrowed by student loan borrowers, by loan component, 2000 to 2010.

University students had the greatest increase in borrowing for course fees, with the average amount borrowed increasing 8.7 percent to $5,380 compared with 2009 (up $430). Private training establishment students also had a significant increase in borrowing for course fees, up 4.0 percent to $5,780 on 2009 (up $220).

Of the different qualification levels, honours and masters students borrowed the most for course fees in 2010 and also had the greatest increases from 2009. Honours students borrowed an average of $5,750 for course fees, up 9.5 percent on 2009 (up $500), while masters students borrowed $6,230 for course fees, up 11.1 percent on 2009 (up $620).

New borrowers

There were 60,846 students borrowing for the first time in 2010, down slightly (decrease of 0.7 percent) compared with new borrowers in 2009.There has been the greatest number of new borrowers using the student loan scheme in 2009 and 2010 since the scheme began in 1992. This coincides with the period of recession in the New Zealand economy that started in 2008. Notable increases in the number of borrowers also occurred in 2000 and in 2006 (as shown in graph below), with the introduction in 2000 of the policy of interest-free loans while studying, and in 2006 the policy of interest-free loans for borrowers living in New Zealand.

Graph, New student loan borrowers, 1992 to 2010.

The only age group that had significantly more new borrowers in 2010 compared with 2009 was students aged 20–24 years, where there was a 3.5 percent increase in new borrowers (10,770 up from 10,404). There was a 2.1 percent decrease in new borrowers aged less than 20 years (33,213 down from 33,927); however this age group still made up the majority of new borrowers (54.6 percent).

Number of student allowance recipients up, as was the amount they received

The number of students receiving a student allowance (a weekly payment to help with living expenses that does not have to be paid back) increased by 16.4 percent in 2010 (up 13,236 on 2009), to reach 93,942 allowance recipients.

Young students made up a majority of the student allowance recipients, with 26.0 percent of recipients aged less than 20 years and 38.2 percent aged 20–24 years. Students aged 20–24 years had the greatest increase in number of allowance recipients of all age groups in 2010, increasing by 20.8 percent from 2009 (35,859 up from 29,682).

Students who received an allowance in 2010 received an average of $6,650, up 1.4 percent on 2009 (up $90).

The increase in allowance recipients is likely to be a reflection of the increased parental income threshold in recent years. In addition, some families had reduced income during the recession, which has led to more students being eligible for allowance funding. The increase in the average student allowance received is likely to reflect the increase in the cap amount a student can receive.

Leaving debt of students who left in 2009 remains steady

Students who left study in 2009 (regardless of whether they completed their qualification or not) had an average student loan debt of $15,340. This is similar to the debt of students who left in 2008.

Of students who left in 2009, graduates (those who completed the qualification they were studying in 2009) had an average leaving debt of $18,080 (down 0.6 percent compared with 2008 graduates). Students who left without completing their qualification left with an average debt of $13,250 (up 0.6 percent compared with those who left without completing their qualification in 2008). Graduates who left study in 2009 with a level 7 bachelor’s qualification had an average leaving debt of $25,750, which was 3.3 percent more than level 7 bachelor’s graduates who left study in 2008 and higher than the debt for any other level of study.

 

Graph, Average student loan leaving debt, by year of leaving study, 1992 to 2009.

Income for study leavers continues to fall

Income one year post-study

The average income one year after leaving study for students who left in 2009 was down 4.5 percent compared with those who left in 2008 ($31,300 down to $29,900). This is the third successive year that average income has decreased for students entering the workforce and reflects the impact of the recession on earnings in the labour market (note that some income returns are yet to be filed with Inland Revenue therefore average income will be revised in future releases).

The drop in income was particularly evident for students aged 20–24 years. The average income one year after leaving study in 2009 was down 7.0 percent for this group compared with that received by students of the same age who left in 2008 ($28,320 for 2009 leavers down from $30,440 for 2008 leavers).

For students who left in 2009, income one year after study decreased by 4.7 percent for males and 4.3 percent for females compared with students who left in 2008. However, males who left in 2009 were still receiving on average 6.5 percent ($1,890) more income than females one year after study. Although significant, this gap has closed somewhat since 2006, when males were receiving on average 13.0 percent ($3,790) more income than females one year after leaving study (see graph below).

Graph, Average income one year post-study, by year of leaving study and sex, 1995 to 2009.  

Average income the year after leaving study decreased for both graduates and those who did not complete their qualification in 2009 compared with those who left in 2008. Graduates who left in 2009 received on average 5.3 percent less income ($32,230 down from $34,040), and those who did not complete their qualification received 3.6 percent less income ($28,100 down from $29,160) than students who left in 2008. However, graduates who left in 2009 still received on average 14.7 percent more income the year after leaving study than those who did not complete their qualification.

Average income the year after leaving study decreased for both male and female graduates who left in 2009 compared with those who left in 2008. Male graduates who left in 2009 received 6.3 percent less income ($32,670 down from $34,870) the following year and female graduates received 4.7 percent less income ($31,940 down from $33,520) than graduates who left in 2008. Male graduates received 2.3 percent more income than female graduates in their first year after leaving study in 2009, which has decreased from 4.0 percent compared with graduates who left in 2008.

Income five years post-study

Graduates who left study in 2005 received on average 1.2 percent more income five years after leaving study than graduates who left in 2004 ($43,040 compared with $42,530). Five years after leaving study, male graduates received significantly more than female graduates, with male graduates who left in 2005 receiving 18.2 percent more than female graduates ($47,380 for males compared with $40,070 for females). The 18.2 percent difference is an increase from the 8.6 percent difference in first-year income for this cohort. Note that income information does not account for any difference in hours worked by males and females.

Graph, Average income five years post-study, by year of leaving study, completion status, and sex, 1997 to 2005.  

On average, income received after leaving study and wage growth experienced over the first five years is higher for graduates than for those who did not complete their qualification, particularly for young students. Graduates aged 20–24 years had noticeable differences in income received and wage growth compared with 20–24 year olds who did not complete their qualification.

Graduates aged 20–24 years who left study in 2005 had an average income of $32,080 in 2006, which increased 41.0 percent to $45,240 by 2010. Students in this age group who left in 2005 without completing their qualification had an average income of $26,870 in 2006, which increased by 31.9 percent to $35,430 by 2010. This means five years after leaving study, graduates in this age group had an average income 27.7 percent higher than those who had left study but not completed their qualification.

Graph, Average income one year and five years post-study, for students aged 20-24 years in leaving year, by year of leaving study and completion status, 1997 to 2009.  

Repayment rates remain similar to previous years

Proportion of debt repaid within five years

Within five years of leaving study, borrowers who left in 2005 had repaid on average 29.1 percent of their leaving debt (debt of $14,690 on leaving in 2005 down to a debt $10,410 in 2010). Note that there is typically a reported downturn in the percent repaid for the last leaving cohort (2005) due to the timing of interest write-offs for borrowers in New Zealand by Inland Revenue.

Graph, Average student loan debt and proportion repaid five years post-study, by year of leaving study, 1992 to 2009.

Repayment by completion status

Graduates who left in 2005 had repaid on average 34.3 percent ($5,980) of their leaving debt by 2010, whereas those who had left study in 2005 without completing their qualification had only repaid on average 23.2 percent ($2,890). This is likely to be due to the higher income of graduates compared with those who left without completing a qualification.

Full repayment of loan

The proportion of students who had fully repaid their debt on leaving study in 2009 was 11.6 percent, which was similar to the previous few leaving cohorts. A slight decrease in students who had fully repaid their loan on leaving study occurred when the interest-free policy for borrowers living in New Zealand began in 2006, although there was no noticeable change in behaviour in 2001 when the zero interest while studying was introduced.

Graph, Proportion of students who fully repaid their student loan on leaving study, and five years post-study, by year of leaving study, 1992 to 2009.

The proportion of students who had fully repaid their debt within five years of studying remained similar to previous years. By 2010, 37.1 percent of student borrowers who left in 2005 had fully repaid their leaving debt five years later. However, the proportion of graduates who left in 2005 and had fully repaid their loan by 2010 was 37.6 percent, 2.1 percent less than graduates who left in 2004 and had fully repaid their debt by 2009.

The proportion of graduates aged 20–24 years when they finished studying in 2005 who had fully repaid their student loan five years later was 32.2 percent. This was 4.3 percentage points less than students in the same age bracket who left study in 2004, with 36.5 percent who had fully repaid their student loan by 2009.

Between 1992 and 1995, the higher percentage of borrowers who had fully repaid their student loans within five years of leaving study was partly due to the number of years available in which people could borrow, as well as the lower course fees in these years. The student loan scheme began in 1992; therefore, those leaving study in the earlier years had fewer years of borrowing to repay than those leaving in later years.

For more detailed data, see the Excel tables in the 'Downloads' box.

  • Share this page to Facebook
  • Share this page to Twitter
  • Share this page to Google+
Top
  • Share this page to Facebook
  • Share this page to Twitter
  • Share this page to Google+