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Student Loan Scheme Act 2011

Matters of general application and miscellaneous matters - Matters of general application

197: Write-off of consolidated loan balance

You could also call this:

"Your student loan can be completely wiped out if you die or owe very little"

Illustration for Student Loan Scheme Act 2011

If you have a student loan, there are certain situations where your loan balance can be reduced to zero. This means you won't have to pay back any more money.

If you die, your loan balance will be reduced to zero. This happens on the day you die. The same thing happens if the Commissioner thinks you have died, even if they're not completely sure.

The Commissioner can also choose to reduce your loan balance to zero if you only owe $20 or less. This happens on the day the Commissioner makes this decision.

Once your loan balance is reduced to zero because you died or because you owed $20 or less, this decision can't be changed. This rule applies no matter what else might be said elsewhere.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM3180405.

Topics:
Education and learning > Higher educationMoney and consumer rights > Banking and loans
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196: Cancellation of interest if consolidated loan balance repaid early, or

"No interest if you pay off your entire student loan quickly after being told how much you owe"

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198: Commissioner may remedy incorrect application of Act, or

"Fixing mistakes in how student loan rules were used for you"

Part 5Matters of general application and miscellaneous matters
Matters of general application

197Write-off of consolidated loan balance

  1. A borrower's consolidated loan balance must be reduced to zero if—

  2. the borrower dies; or
    1. the Commissioner has reasonable grounds for believing that the borrower has died.

      1. The Commissioner may reduce a borrower's consolidated loan balance to zero if that balance is not more than $20.

      2. Subsection (1)(a) has effect from the day on which the borrower died.

      3. Subsection (1)(b) has effect from the day on which the borrower is believed to have died.

      4. Subsection (2) has effect from the day on which the Commissioner exercises his or her discretion to reduce the consolidated loan balance to zero.

      5. If a borrower's consolidated loan balance is reduced to zero under subsection (1)(a) or (2), that action may not be reversed.

      6. Subsection (6) applies despite anything to the contrary.

      Compare
      Notes
      • Section 197: replaced, on (applying for 2013–14 and later tax years), by section 68 of the Student Loan Scheme Amendment Act 2013 (2013 No 10).
      • Section 197(2): amended, on , by section 77 of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).