Student Loans 07
Student loan interest rate reduced.
The student loan interest rate for the 2006-07 tax year has been
set at 6.9%, down from 7.0%.Most borrowers living in New Zealand
will have interest-free student loans from 1 April, thanks to major
legislation enacted last year that will reduce the cost of tertiary
education for hundreds of thousands of people.
Borrowers who qualify for interest-free loans will continue to be
charged interest during the tax year but their interest will be
written off after 31 March 2007.
Most borrowers who live overseas for more than six months, however,
will not qualify for the write-off. Tertiary Education Minister
Michael Cullen says that the new interest rate for those who still
have to pay interest was arrived at by means of a formula that will
add certainty to the annual process of setting the rate. Under the
formula, the total interest rate is based on the five-year average
of the ten-year bond rate, plus a margin to cover administration
costs.
Printer Friendly Page 
