Date payment credited for calculating interest
2012 amendment to the Student Loan Act to correct an error relating to the date payment credited for calculating interest.
A drafting oversight has resulted in the legislation that prescribes how loan interest is calculated, incorrectly deeming payments to be made on the due date rather than the day after the due date as currently occurs.
To ensure consistency between the student loan administrative system and the new legislation, an amendment provides that for the purposes of calculating loan interest, payments are treated as being received on the day after payment was made. For salary or wage deductions this is the 16th of the month in which that deduction was made.
When the student loan system imposes loan interest it is imposed up to and including the date of payment, or for deductions up to and including the 15th of the month in which the deduction was made. For example, if an overseas-based borrower makes a payment on the 10th of August, loan interest is imposed on the outstanding loan balance up to and including the 10th of August.
The amendment applies from 1 April 2012.