Interest-free loans for borrowers studying full-time overseas as undergraduate level

2007 amendment to the Student Loan Scheme Act means students studying full-time overseas at undergraduate level may be granted an interest-free student loan.

Section 38AJ of the Student Loan Scheme Act 1992

The Commissioner has been given the ability to grant borrowers studying full-time overseas at undergraduate level an interest-free loan.

Background

The Commissioner previously had the ability to grant borrowers studying full-time overseas at postgraduate level an interest-free loan, but not those studying at undergraduate level.

Key features

Section 38AJ gives the Commissioner the ability to grant borrowers studying full-time overseas at undergraduate level the full interest write-off which gives effect to interest-free student loans, if the Commissioner considers it fair and reasonable to do so.

For the exemption to apply, a borrower must provide the Commissioner with:

  • a document from the New Zealand Qualifications Authority (NZQA) verifying that the borrower's course is at undergraduate level;
  • evidence from the borrower's overseas education provider confirming that the applicant is enrolled full-time in the undergraduate course verified by the NZQA; and
  • all other information, and in the manner that the Commissioner may reasonably require, to establish whether the grounds for the grant of an exemption apply.

Study at undergraduate level means study that is assessed by the NZQA as being equivalent to level 7 on the New Zealand Register of Quality Assured Qualifications.

Application date

The changes applied from 1 April 2007.