You TubeFacebookTwitterflickrGoogle plus
Thursday, 25 April 2019 03:46 am

Most students still in debt five years after qualifying

Dec 14th, 2011 | By | Category: Front Page Layout, Latest News, News

 

FOURTEEN years after finishing study, Greg Colliss is still paying off his student loan, and doesn’t remember exactly how much is left.

Content to just let his repayments come from his income tax, he is indicative of the majority of current student loan borrowers, according to the latest figures from Statistics New Zealand.

Nearly two-thirds of students have not paid off their debt five years after leaving study, with an average of $10,000 still owed.

Trends for the decade from 1995-2005 show between 31.9% and 37.1% of students had repaid their debt within 5 years, with a rate over 50% not seen since 1992.

 

Average debt at the 5 year mark has risen from $5940 in ’95 to $10,330 in ’99 then remained steady.

Increases in the amount borrowed are mainly due to students borrowing more for course fees, particularly at universities, according to Statistic New Zealand’s media release.

Average debt for those who left study in 2005 is $10,410, which for a student working minimum wage full time for 40 hours a week, would take a further 13 years to pay off purely by income tax, according to the IRD’s repayment calculator.

Saul Gaylard, a local store manager, has been paying off his loan in this way and has about $5000 to go.

“I reckon I’ll have it paid within the next five years,” he says.

Full repayment rates vary widely by age group, with the best being those aged 45-49 at 49.4%, and the worst those aged 60+ at 27.6%.

Younger students are closer to the one-third average, with 31.8% of 20-24 year olds and 37.1% of 25-29 year olds repaying their loan within five years.

Not all graduates face years of debt, with 11.6% of students repaying their debt as soon as they left in 2009, the third highest rate in the past decade.

Joey Parr, now a software analyst, managed to do this by working through his university years and saving money.

“So [it took] years, but I cleared it right after study.”

Average debt at the time of leaving study reached an all-time high in 2009, at $15,340, or 19 years and two months’ worth of the same repayments taken from minimum wage.

One student who graduated a year ago, Vicky, is letting her income tax pay her loan off, but would prefer to make lump sum payments.

“The money is going to other priorities at the moment,” she says.

“I still have such a huge student loan debt so it will be many years before I’m free of that and can look at buying a house.”

Tags: , , , , , , , , , , , , , , ,

is a student journalist with a keen interest in people and life.
Email this author | All posts by

Comments are closed.

Radio News