National Party Pledges Lower Student Loan Repayments for Graduates

The New Zealand National Party has announced a "Back Pocket Boost for Graduates" policy that would reduce the compulsory student loan repayment rate from 12 percent to 10 percent for every dollar earned above $24,128. Finance Minister Nicola Willis stated the change would take effect on April 1, 2027, if the party is re-elected, providing graduates earning $75,000 an estimated $1,000 in additional annual take-home pay.

To offset this relief and combat the "brain drain," the party plans to implement stricter recovery measures for overseas-based borrowers, who account for 93 percent of overdue debt. Proposed penalties include increasing annual interest on overseas balances by 1 percentage point to 5.6 percent and restricting permanent overseas residents from accessing KiwiSaver funds until their loans are cleared. The party also intends to ease the legal requirements for issuing arrest warrants in cases of serious, sustained default.

Party leader Christopher Luxon argued the policy incentivizes talent to stay in New Zealand and provides graduates with more cash for house deposits. However, Labour spokesperson Shanan Halbert criticized the plan, citing National's history of tuition fee hikes and the current freeze on repayment thresholds. Aidan Donoghue of the Victoria University Students Association further argued that the reduction is insufficient as it merely delays repayment without reducing the total debt owed.