Student Loan Overseas Interest

One of the things that surprises many student loan borrowers is that interest is generally charged on the debt if they are living overseas. There are some circumstances under which the IRD can write off interest. The circumstance that affects the greatest number of people is full time overseas tertiary study. In the last few years we have seen changes in the way that the IRD interprets eligibility for this write off. In the past, the IRD required that the reason for the borrower moving was to pursue tertiary study overseas. Then there was a period when the IRD just required overseas tertiary study at a high enough level, and did not take much account of the reason for leaving New Zealand. Many more people became eligible for interest write offs. The IRD is now back to requiring that there is a connection between the move out of New Zealand and overseas study. One way that the connection may be shown is that overseas study was begun within a short period of time of leaving New Zealand. If you have a good case for this interest write off , we advise that you apply for it as soon as possible. It is currently possible to apply many years later, but it may be more difficult to show proof if a long period of time has elapsed.

There are other reasons why interest can be written off, but if you do not qualify, the IRD has to charge interest while you have any debt, if you are an overseas based borrower. If you have a student loan debt the interest charges should be taken into account if you are considering moving out of New Zealand. Not only are these likely to be significant, if you get behind, late payment penalty interest will also be charged.

​If you need help with these issues, please contact us.