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Student Loans and Allowances: 2011
Embargoed until 10:45am  –  04 December 2012
Commentary

The Student Loans and Allowances 2011 information release reports on students who accessed the student support system while participating in tertiary education. The student support system includes the Student Loan Scheme and the Student Allowances Scheme.

 See Definitions section for more details.

 Diagram, student loan borrowers and allowance recipients, for those enrolled in 2011.

Uptake of student loans continues to increase in 2011

The total number of tertiary students enrolled decreased 7.4 percent in 2011, but the total number of student loan borrowers only decreased 2.4 percent. This led to the proportion of tertiary students using the Student Loan Scheme increasing to 48.1 percent in 2011, up from 45.6 percent in 2010. The proportion has been increasing since 2006, when the interest-free student loans policy was introduced.

Not all students are eligible to borrow from the Student Loan Scheme; the Ministry of Education estimates that about 74 percent of those eligible to borrow in 2011 did so, the same proportion as in 2010.

Graph, student loan borrowers and proportion of students who borrowed, 2000 to 2011.

Level of study

The biggest decrease in the number of borrowers in 2011 was for those studying for level 1–3 certificates, down almost 11 percent. Bachelor-level study accounted for almost half of all borrowers. Borrowing at this level was down 0.4 percent, to around 106,000 borrowers. Master's and doctorate students were the only levels of study with more borrowers in 2011.

Number of first-time student loan borrowers down

There were 54,735 students borrowing for the first time in 2011, down 10 percent from 2010. The number of new borrowers decreased across all levels of study in 2011. The largest fall in the number of new borrowers was for those studying at bachelor's level, down 2,784 students (11.3 percent) to 21,960.

Average amount borrowed continues to get bigger

The Student Loan Scheme has three components: course fees, course-related costs, and living costs. The average total amount borrowed by a student in 2011 was $7,630, up 4.5 percent from 2010. This is the highest average amount borrowed since 2000 and included a 7.1 percent increase in the average amount borrowed for course fees. For living costs, the average amount decreased 3.1 percent, and for course-related costs the average borrowed has remained flat, at $990 – just below the maximum of $1,000.

Graph, average amount borrowed by student loan borrowers, by loan component, 2000 to 2011.

Borrowers leave tertiary study with more debt

Borrowers who left study in 2010 had an average student loan leaving debt of $16,050, up almost 5 percent compared with 2009 leavers. This is the largest average leaving debt since the Student Loan Scheme was introduced in 1992. Borrowers who studied at bachelor's level and left study in 2010 had an average student loan leaving debt of $22,060, up 2.5 percent from 2009.

Average repayments rise

Borrowers who left study in 2005 had an average student loan leaving debt of $14,730 – by 2010 they had repaid 32.2 percent. Borrowers who left study in 2004 had an average student loan leaving debt of $14,240, and had repaid 29.2 percent by 2009.

Graph, average student loan leaving debt and average debt five years post-study, by year of leaving study, 1992 to 2010.

Graduates repay faster

Graduates have higher average leaving debt than non-graduates, but their higher income from paid employment allows them to pay back their loan faster. For graduates who left in 2005, their average income from paid employment was $43,770 in 2010, about 22 percent higher than for non-graduates. These graduates had repaid an average 37.0 percent of their loan within five years, compared with an average 26.6 percent for students who left study without completing their qualification.

 Graph, average percentage of repaid five years post-study by graduates and non-graduates, by year of leaving study, 1997 to 2005.

Higher proportion of loans being fully repaid within five years

For students who left study in 2005, 38.0 percent had fully repaid their student loan debt within five years. Based on modelling for future repayments, the Ministry of Education forecasted the median repayment time for those leaving study in 2005 as seven years.

Number of student allowance recipients rises

The Student Allowances Scheme provides financial support to eligible students during their time of study. Student allowances, unlike student loans, do not have to be repaid.

The number of students receiving a student allowance in 2011 increased 3.6 percent, to 97,308 students. This continued the increasing trend that began in 2006. The proportion of all tertiary education students accessing the Student Allowances Scheme in 2011 was 22.6 percent, up from 20.2 percent in 2010.

The increase in the number of allowance recipients began in 2006, and most likely reflects the increased parental income threshold since then. The economic downturn has meant some families have experienced reduced earnings, which has led to more students being eligible for allowance funding.

Graph, student allowance recipients and proportion of students receiving an allowance, 2001 to 2011.

Average amount received increases

The average student allowance amount received in 2011 was $6,770, 1.8 percent higher than in 2010. The average student allowance has been increasing since 2009 – the average amount received in 2011 continued the increasing trend started in 2009. The increase in the average student allowance received is likely to reflect the increase in student allowance payment rates.  

Graph, average amount received by student allowance recipients, 2001 to 2011.

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

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