Labour To Cut Student Debt
Labour will cut student debt by 10%, helping people pay their loans off sooner, and supporting Kiwis to build a future here in New Zealand.
“If you have a student loan and stay in New Zealand, under Labour you will owe less,” Labour Leader Chris Hipkins said.
“If you’ve finished your study, didn’t benefit from Fees Free and are still paying off your loan, you’ll get the cut on 1 April 2027. Current and future students will get it after staying in New Zealand for three years once they finish their study. And if you owe $2,000 or less, we’ll wipe it off completely.
“Student debt can follow people for years, making it harder to save for a home, start a family or simply get ahead.
“This policy means more money to save for a home, start a family, build a business or just have a bit more breathing space.
“New Zealand invests in education because we believe people’s talent and hard work should strengthen our country. We want to make it easier for our graduates – be it nurses and healthcare workers, electricians, or social workers – to stay and build a future in New Zealand.
“That’s the kind of country Labour wants to build, where hard work opens doors, young people can see a future for themselves, and people don’t have to leave New Zealand to get ahead,” Chris Hipkins said.
“Education should open doors, not leave people carrying debt for decades,” Labour tertiary spokesperson Shanan Halbert said.
“This policy means graduates can move forward sooner – with less debt, more of their income in their pocket and a better chance to build their lives here in New Zealand.
“People have done the hard work to get a qualification. They shouldn’t have to spend years watching their student loan barely move.
“Labour will cut that debt and give people a bit more freedom to get on with their lives,” Shanan Halbert said.
Note:
How does this work?
Labour will write 10% off eligible student loan balances on 1 April 2027. Eligible borrowers with less than $2,000 remaining will have their balance written off completely.
Who is eligible?
For the 1 April 2027 write-off, borrowers must not currently be studying, must beNew Zealand-based, must be compliant with their repayment obligations, and must not have benefitted from Labour’s Fees Free policy.
For current and future students, they must remain in New Zealand for three years after they stop drawing down a student loan, not have benefitted from Fees-Free, and remain compliant with their repayment obligations.
What if I’m still studying or stop drawing down on my student loan?
Current students will not receive the April 2027 write-off. For future borrowers, eligibility is based on when they stop drawing down on their student loan, not when they graduate. Recognising that life can throw curveballs, there will be an option to defer claiming the 10% if students have to take a break from study.
Can I travel overseas and still qualify?
Yes. Borrowers can travel overseas and still qualify as long as they remain classified as a New Zealand-based borrower under the existing student loan rules throughout the three-year qualifying period.
If they become an overseas-based borrower during that period, they will not qualify for the write-off.
What if I want to go back and study?
You can. We know people don’t always study continuously, and life can get in the way.
Borrowers will have the choice to defer their write-off if they think they may want to draw down on their student loan again.
That means people can decide whether to take the 10% write-off once they qualify or hold onto it for later if further study is part of their plans.
A great way for our country to help those who are helping themselves. This one is good as it rewards those students who continue to live in NZ, have worked hard, and are paying their student loans regularly. They are not students who have left the country, without paying their fees, which sadly means they can’t return unless they make arrangements to pay what they ‘owe our country’! A helpful piece of legislation – so well done Labour.