The student loan interest rate will increase from its present level of 6.7% to 6.8% on 1 April 2009, Revenue Minister Peter Dunne announced today.
As interest is written off for borrowers in New Zealand, the increase will affect only those borrowers who are based overseas - those who leave New Zealand for more than six months.
Mr Dunne said there had been a marginal increase in the rate because it is calculated on a "long-run average".
"The interest rate is based on a five-year average of the ten-year bond rate, plus a margin to cover administration costs. A long-run average is used to smooth movements in market interest rates. Current interest rates will be taken into account when setting next year's interest rate," Mr Dunne said.
The new rate was approved by Order in Council today.
Revenue Minister Peter Dunne today announced four more charitable organisations whose volunteers may qualify for to have their student loans interest-free while serving overseas.
From 1 April this year, Australian Volunteers International, Pioneers (New Zealand), Presbyterian Church of Aotearoa New Zealand and Students Partnership Worldwide (Australia) will join a list 54 other approved charities.
Borrowers working overseas for charitable organisations on the list must apply to Inland Revenue to determine if they qualify for an interest write-off on their student loan. Interest-free loans are usually available only to borrowers who have been present in New Zealand for six months.
However, an exemption from the New Zealand-based requirement may be made for borrowers working in aid activities for free or a token payment for charities named on the list.
"The provision recognises the special circumstances of borrowers who work for charitable organisations whose contribution is not based on profit or remuneration." Mr Dunne said.
The charities named were approved today by Order in Council, which also recognised a name-change for Campus Crusade for Christ New Zealand, now known as Tandem Ministries.
Contact: Mark Stewart, Press Secretary, 021 243 6985