Student Finances

How to pay for university in New Zealand

Student Finances

Higher education in New Zealand isn’t free and students must pay tuition fees, which go towards funding their course and to support them during their studies.

The fee for the least expensive standard, full-time Bachelor of Arts course is around $10,000 per year, while engineering students pay around $17,000 per year and those taking specialist science courses substantially more. Basic living expenses (including accommodation and food) are unlikely to be less than $250 per week, in addition to the cost of books, entertainment and transport.

Very few students are fortunate enough to have parents who can afford to pay all their expenses or are able to find jobs to finance their studies. Students can apply for a Student Allowance, which is income tested, although the income limits are relatively low in New Zealand terms and most students don’t qualify.

If the combined parental income (or student income if they’re 25 or over) is less than $33,696 per year (in 2005 – it's adjusted annually on 1st April) students qualify for the top levels of Allowance (the StudyLink website, , has an Allowance calculator). However, Allowances are reduced progressively as combined income increases and reaches zero once income reaches $56,457 for students living at home or $62,148 for students living away from home, and even the maximum Allowance doesn’t cover the total cost of higher education. Universities offer a number of scholarships to promising students, although the number is limited and few students can depend on them to finance their studies.


As a result of the above, most students obtain a loan to cover the difference between their Allowance or their parents’ contribution and their tuition fees and living expenses – a gap that’s set to increase further in the next few years, as many universities are planning to increase their fees drastically.

New Zealand introduced a system of student loans in 1992, which allows students to borrow up to $10,500 per year. Factors such as age, credit rating, income and parental income don’t affect your entitlement to a loan, nor is it necessary to provide security or a guarantee. Loans are, however, restricted to New Zealand citizens and permanent residents.

There are four elements to a student loan: a contribution towards compulsory fees, course related costs (such as books), living costs and an administration fee. To qualify for a loan, students must be studying a course that’s either funded by the Ministry of Education or recognised as a qualifying course. The latter category refers to courses offered by private organisations rather than state colleges and universities, and these must consist of full or part-time study for at least a year. Students can usually take out a loan for living costs even if the course they’re following isn’t Ministry-funded. Those who receive a Student Allowance can also apply for a student loan (indeed they usually need to), but aren’t entitled to the part of the loan that applies to living costs.

Student loans must be repaid through deductions from your salary once you’re working. Your employer deducts a fixed monthly amount and sends it to the Inland Revenue Department (IRD). The repayment rate is 10 per cent of your income above $16,172 (for 2005, increasing to $16,588 for 2006). You have the option of repaying more or the entire loan at any time. Loans attract an annual interest rate (7 per cent for 2004/05), although you can apply for an interest ‘write off’ if you’re a full-time student or a part-time student earning no more than $26,140 a year.

Since 1992, many students have taken advantage of loans (around 400,000), the average student having to repay $14,580, although some students on longer courses, such as medicine, accumulate debts of $75,000 or more (the highest recorded is $230,810!). However, if the graduate leaves New Zealand and earns no money there, compulsory payments cease, with the result that many graduates with large student debts emigrate.

The problem is particularly serious among health professionals, with the country suffering a doctor ‘brain drain’. The government is working on an amendment of the law, which will mean that graduates must repay their student loan irrespective of where they live or work. A government committee has also been established to address the problem of student debt among medical students, and the New Zealand Medical Association is calling for significant financial help for current and future medical students. The Council of Trade Unions is campaigning vigorously for the abolition of the student loan system.

If the financial situation for New Zealand students isn’t good, it’s much worse for foreign students, who don’t qualify for a student loan and are charged much higher fees by universities and colleges.

Education NZ (PO Box 10-500, Wellington, Tel. 04-472 0788, ) provides information and advice to overseas students wishing to study at higher education institutions in New Zealand.

Postgraduate Studies

All universities provide facilities for postgraduate study, usually within their subjects of speciality only. Students who climb this far up the academic ladder are rewarded by much lower tuition fees than for first degree courses. This reflects the contribution that postgraduate studies make towards a university’s reputation and prestige.

It’s also common for New Zealand students to undertake postgraduate studies at foreign universities, usually in Australia, the UK or the USA, particularly when their area of expertise isn’t well catered for in New Zealand. Foreign postgraduate students are also welcomed at New Zealand universities and are offered the same favourable rates as local students.

Further reading

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