One Taupō woman is struggling to repay a $58,000 student loan from 20 years ago, with the repayments now being deducted from her pension. This has forced her to make sacrifices in order to make ends meet.
Calls have been made for better guidelines on student loan eligibility and improved communication between Inland Revenue and older students to prevent situations like this from occurring.
Fenella, the woman from Taupō, took out a student loan to pursue a business degree two decades ago. After her partner stopped helping her with the repayments, she found herself struggling to cover her expenses on a pension.
With Inland Revenue deducting 12% of every dollar earned over a certain threshold for student loan repayments, many pensioners are finding it difficult to make ends meet.
Age Concern chief executive Karen Billings-Jensen highlighted the challenges faced by older New Zealanders who rely solely on superannuation as their income, especially when faced with rising costs of living.
While Minister of Revenue Simon Watts stated that New Zealand Super is taxable income and subject to deductions for student loans, he did not indicate any plans to change the current system.
The Department of Inland Revenue encouraged individuals struggling with student loan repayments to reach out for assistance.
