Sample Student Loan contract

This is a sample of a Student Loan contract.

Student Loan Contract

This is your contract with the Crown under the Student Loan Scheme to receive and repay a student loan. The purpose of this scheme is to provide financial help to students enrolled in approved courses and programmes with tertiary education providers in New Zealand.

Your loan contract is in 3 parts:

In Part 1 you will find your student loan details.
In Part 2 you will find the terms and conditions of your loan.
In Part 3 you will find the schedule.

The terms used in this document are explained in the definitions.

If you have any queries about any part of this loan contract please see the enclosed booklet or contact either StudyLink or Inland Revenue. You may also want to get your own independent advice on the loan contract.

Remember: Taking out a loan is a big decision. You will have to pay it back, so only borrow what you need.

Introduction

The details in this loan contract may change from time to time as set out in the Act. If there is any conflict between this contract and the Act - the Act prevails.

1. Parts of your loan

We pay:
1. the maximum fees you are entitled to directly to your education provider
2. course-related costs to your chosen bank account, and
3. living costs to your chosen bank account each week starting in the second week of the loan period. The final payment will be made at the end of the loan period.
We charge an establishment fee as set out in the Schedule.
For study starting on or after 1 January 2013, a borrowing limit of a maximum of 2 EFTS applies for each loan period.

2. When your contract is binding

This contract is binding if everything on the following list happens:
1. you apply for a loan and provide all the information we require
2. we are satisfied that you meet our eligibility criteria
3. your education provider confirms:
  1. that you are enrolled to study for a course
  2. the amount of your fees or the maximum amount of the fees limit set by us
4. we confirm your loan with a letter called the loan entitlement advice which will detail:
  1. what you borrowed e.g. the amounts for fees, course-related costs and living costs
  2. the loan period
  3. interest and other information about your loan

3. Right to cancel your loan contract

You may cancel this loan contract by:
1. notifying us in writing of the cancellation within 7 working days of the date on which the initial loan entitlement advice was issued, and
2. returning what you've borrowed under this loan contract.

4. Changes and your continuing eligibility

It is your responsibility to make sure you meet and continue to meet all of the eligibility criteria for your loan. You must also notify us immediately of any changes to your address, course or education provider or if you don't meet attendance requirements.
We may stop payments to you, including the living costs, at any time, if:
1. the loan is not being used as the Student Loan Scheme intended
2. you do not meet your obligations under this loan contract
3. you do not meet attendance requirements
4. you no longer meet the eligibility criteria - for example you:
  1. reach your life-time limit
  2. do not meet the performance requirements
  3. do not meet the residency requirements
  4. do not meet the overseas study requirements
  5. become an undischarged bankrupt
  6. are no longer studying fulltime
  7. serve a prison sentence
  8. have applied for and receive a Work and Income benefit or some other government assistance
  9. reach the age of 55 years from 1 January 2013
  10. are under 18 years and on a targeted government funded course
If any change decreases or cancels your loan, you:
1. agree to refund any fees to which you are no longer entitled. If you are entitled to a refund from your education provider this amount will be repaid to us by direct credit.
2. will pay back the amount of any fees, living costs, course-related costs or any administration or establishment fees that you were not entitled to. The amount of non-entitlement will be established as a debt to the Crown for repayment.

5. Right to lodge an objection

You have the right to object to us about any amount borrowed under this loan contract. You will be notified of your objection rights and the timeframe to lodge an objection when a statement is sent to you. You must lodge an objection within this timeframe.

6. Transfer of your loan and keeping Inland Revenue informed

Your loan is transferred to Inland Revenue for collection.
If you have an existing loan with Inland Revenue, the transferred loan is added to it.
Inland Revenue may apply administration fees as set out in the Schedule.
After the loan is transferred to Inland Revenue you may dispute and challenge some Inland Revenue decisions. See www.ird.govt.nz/studentloans for further details.
You must tell Inland Revenue immediately of any change to your contact details (including your alternative contact person).

7. When you will be charged interest

If you are a New Zealand based borrower, you have an interest free loan unless you have incurred late payment interest.
Overseas based borrowers are charged interest.
Interest is charged in accordance with the Act. For further details and current interest rates see www.ird.govt.nz/studentloans.

8. Repaying your loan

Your repayment obligation is determined under the Act and depends on your income, and whether you are a New Zealand based borrower or overseas based borrower. For more information on repaying your loan see www.ird.govt.nz/studentloans.
You must repay you loan in full immediately on demand if you:
1. become bankrupt or enter in an agreement with creditors
2. have committed any fraud to get your loan
3. do not pay any amount due under the Act
4. do not comply with your obligations under clause 9
5. have not complied with any provision of the Act for 2 years or more.
Inland Revenue can recover the loan from you using any legal remedies available.

9. How notices are sent and received

Notices may be sent electronically, hand delivered to you or posted to an address you have given us or Inland Revenue and may be included with any loan entitlement advice.
Notices sent by ordinary mail by us or Inland Revenue are treated as if you received them on the 4th working day after posting.
You may give notices by sending them to us or Inland Revenue electronically or through the post.

10. Governing Law

This loan contract is governed by the laws of New Zealand and the New Zealand courts have the right to hear and make a decision on all issues to do with this loan contract.
Nothing in this loan contract limits our right to start legal action against you in any country.
If we do take legal action against you, that does not prevent us taking legal action in any other country, at the same time or some other time.

11. You are responsible for this loan

You cannot assign your rights or obligations under this loan contract to any other person.

12. Offences

We or Inland Revenue may take action against you or prosecute you for offences under the Crimes Act 1961 or the Act. You may be liable to pay penalties, fines or subject to imprisonment as a result.
Prosecution under the Act does not stop other legal actions being taken against you.

Establishment fee:	$60
Administration fee:	$40 for each tax year that you have a loan, unless you are charged an establishment fee for that tax year, or your loan on 31 March of that tax year is less than $20
Annual repayment threshold for NZ based borrowers:	$24,128 for the tax year ending 31 March 2025
Repayment percentage for NZ based borrowers:	12% for the tax year ending 31 March 2025
Base interest rate:	3.3% per year for the tax year ending 31 March 2025
Late payment interest:	0.58% per month
Address details:	StudyLink StudyLink Centre PO Box 38610 LOWER HUTT 5040 Phone: 0800 88 99 00 www.studylink.govt.nz	Inland Revenue Inland Revenue PO Box 39010 Wellington Mail Centre LOWER HUTT 5045 Phone: 0800 37 77 78 www.ird.govt.nz/studentloans
Inland Revenue has a range of phone numbers and addresses for handling enquiries about Student Loans. These can be found at www.ird.govt.nz/contact-us/a-z/student-loans.