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Digest No. 1747

Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill 2009 (2009 No 59-2)

Date of Introduction: 04 August 2009
Portfolio: Revenue
Select Committee: Education and Science
Date report presented: 27 November 2009
Published: 22 February 2010by John McSoriley BA LL.B, BarristerLegislative AnalystP: (04) 471-9626 (Ext. 9626)F: (04) 471-1250 Caution: This Digest was prepared to assist consideration of the Bill by members of Parliament. It has no official status.Although every effort has been made to ensure accuracy, it should not be taken as a complete or authoritative guide to the Bill. Other sources should be consulted to determine the subsequent official status of the Bill.

Purpose

The main aim of the Bill is to amend the Student Loan Scheme Act 1992 (the Act) to:

  • exempt from the rule that borrowers are required to be present in New Zealand for 183 or more consecutive days to qualify for an interest-free loan, borrowers who were not in New Zealand but were still in the Realm of New Zealand (that is, in Niue, the Cook Islands, Tokelau, or the Ross Dependency), and borrowers engaged in full-time study overseas either under a New Zealand Government-approved formal exchange programme or under a formal agreement between a New Zealand tertiary education provider and an overseas tertiary education provider;
  • allow the Commissioner of Inland Revenue to increase the standard rate of repayment deductions from 10 to 15 cents in the dollar where borrowers have failed to have correct deductions made or failed to pay any other due amount;
  • allow loans which are fully repaid before the borrower is back in New Zealand for 183 days to be interest-free for the period the borrower was back in New Zealand;
  • increase from 15 to 30 days the grace period in which a borrower may repay their loan fully without incurring further interest.

Main change to the Bill

Overseas study exemption

The Select Committee has recommended that the overseas study exemption be extended to borrowers engaged in full-time study overseas where their New Zealand tertiary education provider verified that the study could not be completed in New Zealand, and would count towards a New Zealand qualification at level eight or above on the New Zealand Register of Quality Assured Qualifications (Part 1, Clause 14, inserting New Section 38AJA into the Act).

Definition of "overseas tertiary provider"

The Select Committee has recommended the insertion in New Section 38AJA (described above) a new definition, that of " overseas tertiary provider" That term means " ... an institution or organisation that ... provides tertiary education or training ... and ... is based in a country other than New Zealand ... and ... is registered by an appropriate education authority in that country" (Part 1, Clause 14, inserting New Section 38AJA into the Act, new subsection 4, definition of "overseas tertiary provider").

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