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July 13, 2009 | by  | in News | [ssba]

Changes to student loan management proposed

Something to alt‑tab to while you’re dicking around on YouTube

The Government is inviting the public’s view on a set of proposed changes that will simplify the way student loan repayments are managed.

Under a set of proposals announced by Revenue Minister Peter Dunne, borrowers will be able handle their loans on an all-purpose management site.

The changes are the first step towards establishing a fully-fledged online post for all taxation inquiries and issues.

For student loan borrowers, it will mean the eradication of yearly letters, “square-ups” and telephone calls, with up‑to‑date details available online at the user’s discretion.

In addition to the new web-based system, changes to the way student loan repayments are made have also been proposed.

Under the current proposal, the annual $19,084 threshold at which employees must begin to repay their student loan will be removed in favour of a weekly, fortnightly, or monthly threshold, depending on when the employee is paid.

If a borrower should work for only part of the year and exceed the specified pay-period threshold for that work, loan payments will be deducted from their pay.

On the basis of the current annual threshold, borrowers paid weekly would be required to make payments once they earn over $367.

“Streamlining the repayment system and improving the service is in everyone’s best interests,” Dunne said.

If enacted, the new rules would apply from mid-2011.

Labour’s Tertiary Education Spokesperson Maryan Street welcomed Dunne’s plans to simplify student loan repayments, but called the proposed threshold changes tough.

Pointing to the weekly threshold of $367, Street noted that many students would earn more than that during holiday work, and would be unfairly zapped of money they could potentially be saving.

“This would be a harsh and punitive step,” Street said.

People interested in submitting their thoughts on the proposed changes are invited to participate in an online forum on the Inland Revenue website.

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