Amendment to Student Loan Scheme Act exempts borrowers studying overseas under exchange programmes from being in NZ to qualify for a loan. Applies from 1 Apr 2007.
Sections 38AA, 38AC, 38AI, 38AJA, 38AK and 65A of the Student Loan Scheme Act 1992
Borrowers engaged in full-time study overseas under a formal exchange programme approved by the New Zealand Government, or a formal agreement between a New Zealand education provider and an overseas tertiary education provider, or post-graduate study that cannot be completed in New Zealand may be granted an exemption from the requirement that they be present in New Zealand to qualify for an interest-free loan.
Background
Provisions in effect from 1 April 2000 to 31 March 2007 entitled borrowers who were resident in New Zealand for income tax purposes to a full interest write-off if they were engaged in full-time, full-year study. Part-time or part-year students could also qualify if their income was below a certain level. The student's New Zealand tertiary education provider was required to confirm the level of study. This had the same effect as allowing a loan to be interest-free.
From 1 April 2006, borrowers engaged in full-time, post-graduate study overseas can have an exemption from the requirement that they be in New Zealand to qualify for an interest-free loan. When this exemption was later extended to under-graduate study, it was considered that the earlier provisions referred to in the paragraph above were redundant and they were repealed. However, this exemption does not apply to borrowers studying overseas, who are enrolled with a New Zealand tertiary education provider. There was therefore a gap in interest-free loans for some students who are or were studying overseas from 1 April 2007.
Key features
Borrowers who are enrolled with a New Zealand tertiary education provider, and are studying full-time overseas towards their New Zealand qualification may be granted an exemption from the requirement that they be present in New Zealand to qualify for an interest-free loan. To qualify the study must be one of the following:
- a formal exchange programme approved by the New Zealand Government;
- a formal agreement between a New Zealand education provider and an overseas tertiary education provider; or
- post-graduate study that cannot be completed in New Zealand.
The New Zealand provider must certify that the student is enrolled in full-time study. Providers must also certify that if the studies are successful, they will be credited to a qualification offered by the New Zealand provider that is at level seven or above - or level 8 or above in the case of post-graduate study that cannot be completed in New Zealand - on the New Zealand Register of Quality Assured Qualifications.
Application date
The amendments apply from 1 April 2007.