The New Zealand Student Loan Scheme — The Numbers

The New Zealand Student Loan Scheme — The Numbers

The student loan scheme is the largest single financial commitment most New Zealanders will ever make, and one of the largest the Crown carries. It has lent more than $35 billion since 1992, and the balance still outstanding sits in the tens of billions.

It is also unusual. Loans are interest-free for borrowers who stay in New Zealand, repayments are collected through the tax system, and the Government knows from the start that it will not get all of it back. That expectation is not a guess — it is calculated, published and audited every year.

What follows is the scheme in numbers: who owes, how much, and what the Government expects never to recover.

How We Researched This Guide

Two sources do the work here. Inland Revenue publishes quarterly student loan statistics covering borrowers, balances, repayments and overdue amounts. The Ministry of Education publishes the Student Loan Scheme Annual Report, which carries the audited financial schedules and the cost-of-lending analysis; we have used the 2024/25 report.

The two do not publish identical figures because they measure their populations on different dates and definitions. Each figure is used exactly as its source states it, and Inland Revenue's June 2026 quarter stays provisional until its annual report is published.

The Quick Summary (60-Second Version)

If you read only one part of this guide, read this.

• 626,336 people had a student loan at 30 June 2026, up 0.6 per cent on the year.
• The total nominal balance was $16.9 billion — $12.4 billion owed here and $4.5 billion owed by borrowers overseas.
• In 2024/25 the Government lent $1,709 million, and wrote down $585 million of it at the point of lending.
• The Ministry of Education puts the average cost of lending at 34.24 cents in every dollar lent.
• Overdue repayments reached $2,674 million at 30 June 2026, and $2,491 million of that was owed from overseas.
• The repayment threshold is $24,128, and borrowers repay 12 cents in every dollar earned above it.

What the Scheme Costs, and What It Expects Back

The most revealing number in the scheme is not the balance owed. It is the write-down. Because New Zealand-based loans carry no interest, and because some borrowers never earn enough to repay while some overseas borrowers simply do not, the Crown does not expect to recover everything it hands out.

Each year the Ministry of Education values that gap. In 2024/25 it lent $1,709 million, and recorded an initial write-down on new borrowing of $585 million — an average cost of lending of 34.24 cents in every dollar lent, the Government's own estimate of the subsidy it provides.

Turned around, that is roughly 66 cents of each dollar lent that the Government expects to come back. A year earlier, in 2023/24, the same measure was 40.36 cents in every dollar — a movement the scheme's valuation ties mainly to discount rates.

Who Owes, and Where They Live

At 30 June 2026 there were 626,336 student loan borrowers, up 0.6 per cent from 622,892 a year earlier. The split is stable and lopsided: 512,938 were New Zealand-based and 113,398 were overseas-based.

The two groups behave nothing alike. Inland Revenue reports that 95.4 per cent of New Zealand-based borrowers met their repayment obligations at 30 June 2026, against 32.1 per cent of overseas-based borrowers — 83.9 per cent across the whole population.

The Ministry's annual report records 121,779 students borrowing in 2024/25, with the average amount borrowed that year at $12,090. In the scheme's first year the average was $282.

The Balances and What Is Lent Each Year

Inland Revenue's numbers cover the stock of debt. The nominal balance is the total owed, including principal not yet repaid and any penalties, interest, or fees attached to it. At 30 June 2026 it stood at $16.9 billion, up 4.0 per cent on the $16.2 billion a year earlier.

Overseas-based borrowers are 18 per cent of the total, but they owe $4.5 billion — more than a quarter of the balance. The median balance is the better guide to a typical borrower because a few considerable balances pull the average up. At 30 June 2026 it was $18,301, up 4.5 per cent from $17,516.

Repayments: What Comes In

Repayments arrive through three channels: deductions employers make from salary and wages, payments borrowers in New Zealand make directly, and payments from borrowers living overseas.

Inland Revenue's quarterly statistics for the quarter ending 30 June 2026 show employer deductions of $270 million, direct payments from New Zealand-based borrowers of $75 million, and payments from overseas-based borrowers of $72 million — $417 million in total, against $405 million in the same quarter a year earlier.

The direction of travel between those three channels matters. Employer deductions fell 1.2 per cent on the same quarter a year earlier, direct payments from borrowers in New Zealand rose 8.0 per cent, and payments from overseas-based borrowers rose 15.7 per cent. Total repayments collected across 2024/25 were $1.56 billion.

Overdue Repayments and the Overseas Split

Overdue repayments are the part of the book that has fallen due and not been paid. At 30 June 2026 they totalled $2,674 million, up 6.6 per cent from $2,509 million a year earlier.

Almost all the growth came from offshore. Overdue repayments owed by overseas-based borrowers rose 7.3 per cent to $2,491 million, while those owed by New Zealand-based borrowers fell 2.0 per cent to $183 million. Put plainly, the overwhelming majority of the overdue balance sits with borrowers no longer in the country.

The number of borrowers behind on repayments tells the same story from another angle. At 30 June 2026, 100,658 borrowers had an overdue repayment, down 2.9 per cent on the year — but that fall came entirely from borrowers in New Zealand, where the count dropped 11.5 per cent to 23,637. The overseas count was effectively unchanged at 77,021.

The Threshold and the 12 Per Cent Rate

For borrowers in New Zealand, repayment is set by income rather than by the size of the loan. The repayment threshold is $24,128, and borrowers repay 12 cents in every dollar they earn above it. The threshold has been frozen at $24,128 since 1 April 2024 and is currently set to remain there. Inland Revenue illustrates the threshold as $464 a week from 1 April 2025.

The freeze is deliberate rather than automatic, and it was announced in February 2025. Inland Revenue's annual report records that fixing the threshold has increased the fair value of the scheme by $77 million because a threshold that does not rise with inflation leaves more income above the line each year.

Borrowers earning salary or wages have deductions made every pay, treated as full and final unless the under-deduction is significant. Anyone earning other income, or who is self-employed, is assessed at the end of the tax year instead.

Fully Repaid, Written Off, or Still Running

Loans leave the scheme three ways: repaid in full, written off, or still on the books. Since 1992, 1.5 million students have borrowed $35.8 billion through the scheme, and repayments in 2024/25 alone were $1.56 billion.

Write-offs are narrow and specific. A loan balance is written off when the borrower dies, is declared bankrupt, or where the debt arose from fraud. In the year to 30 June 2024, $28.8 million was written off after the death of borrowers and $5.7 million after bankruptcy.

What does not get removed quietly is growth by penalty and interest. In 2024/25, Inland Revenue added $147.7 million of penalties to balances and charged $86.1 million of interest to overseas-based borrowers — both of which sit inside the $16.9 billion total rather than beside it.

Questions You Might Have

Do I pay interest on my student loan?

Not while you are New Zealand-based — loans are interest-free for borrowers treated as being in New Zealand. Interest is charged to overseas-based borrowers, and late payment interest applies to overdue amounts of $334 or more.

What happens when I move overseas?

Your repayment obligation changes shape. Instead of a percentage of income, an overseas-based borrower's obligation is based on the size of the loan and is generally assessed twice a year. This is the group where compliance is weakest — 32.1 per cent met their obligations at 30 June 2026, against 95.4 per cent of borrowers in New Zealand.

Why does the cost of lending figure move each year?

Because it is a valuation rather than a tally of cash: it compares what was lent with the present value of the repayments expected from it, so it shifts with discount rates and modelled borrower behaviour. The Ministry reported 34.24 cents per dollar for 2024/25 and 40.36 cents for 2023/24.

How current are these figures?

The quarterly statistics appear about two months after each quarter ends, and the June 2026 figures are provisional until Inland Revenue's annual report is published. The audited position comes from the Ministry of Education's annual report, which most recently covers 2024/25.

Does the scheme get repaid through tax?

Partly, and that is the design. Borrowers in New Zealand repay through the tax system, either as employer deductions from salary and wages or through an end-of-year assessment on other income. In the quarter to 30 June 2026, employer deductions accounted for $270 million of the $417 million received.

What Matters Most

Three numbers explain the scheme best. The cost of lending — 34.24 cents in every dollar — is the price the Government accepts for lending without interest. The $4.5 billion owed from overseas is the part of the book least likely to return on schedule. And the threshold, $24,128 with 12 cents on every dollar above it, is how the whole thing is collected.

None of it is hidden. The assumptions, discount rates and write-off rules behind these figures are published, and the figures are audited each year. Every one was read from Inland Revenue's quarterly statistics or the Ministry of Education's annual report.