Labour will cut 10% off eligible student loan balances, so graduates who study, work and stay here can pay off their loans sooner, keep more of their pay, and get ahead at home.
- Eligible student loan balances cut by 10%
- Already finished study and still repaying? Get the 10% cut on 1 April 2027
- Current or future student? Get the 10% cut after 3 years based in New Zealand following the end of your study
- Balances of $2,000 or less written off completely after the 3-year track
- Does not apply to graduates who benefited from Fees Free
- Repayments remain income-based, as under the current system
- Estimated cost: nearly $40 million a year once fully running, from 2031
Labour will cut student debt. If you've finished your study and you're still paying off a student loan, we'll wipe 10% off what you owe on 1 April 2027. And for every student who comes after, if you stay in New Zealand for three years after you finish your study, we'll also wipe 10% off what you owe.
Graduates will pay off their loans sooner, keep more of their pay, and get ahead here at home. Only with Labour. Better starts now.
Student debt can hang over people for years. It makes it harder to save for a home, start a family or plan for the future.
A Labour Government will make sure New Zealanders who study, work and contribute here can get ahead here. No one should have to move overseas to build a future.
What Labour will deliver
- Cut student debt. On 1 April 2027, New Zealand-based borrowers who have finished their study will have 10% of their student loan written off.
- A 10% cut for people who stay. Current and future students who stay in New Zealand for three years after they finish study will also have 10% of their loan written off.
- Wipe off small balances. Graduates who owe $2,000 or less after three years will have their remaining debt written off completely.
- Reward people who meet their obligations. The 10% cut will apply to graduates who are up to date with their loan obligations and did not get Fees Free.
- Back graduates who build their future here. Cutting student debt by 10% for everyone who stays gives graduates a lasting reason to work and build their future in New Zealand.
How it will work
If you've already finished study
If you've finished your study and are still paying off your loan, and you did not benefit from Fees Free, you'll get the 10% cut on 1 April 2027.
If you're a current or future student
- Finish your study and stay. Once you've finished your study, stay in New Zealand and keep up with your loan obligations for three years.
- Get the cut. After three years, we'll cut what you owe by 10%. Debt of $2,000 or less will be written off completely.
Student loan repayments will still be based on income. People who earn too little to make repayments can still qualify, as long as they are meeting their obligations. To be eligible, graduates must be New Zealand-based borrowers.
Case studies
Each example assumes the person started study from 2025, stays in New Zealand for three years after graduating, and keeps up with their loan obligations, with the 10% applied to the balance still owed at that point. These examples are illustrative only. Actual outcomes will depend on individual salaries, pay progression, loan balances and any future changes to repayment settings.
A new graduate nurse
Tom starts a nursing degree in 2025 and begins his first nursing role in 2028 on about $77,000, with a student loan of just under $40,000. If he stays in New Zealand, under Labour's Graduate Nurse Job Guarantee, Labour will also write off 10% of what he still owes in 2031, around $2,000. Tom would finish repaying his loan sooner and keep more of his pay.
A first-year house officer
Mia starts her medical degree in 2025 and later begins work as a doctor on around $105,000, with a student loan of about $120,000. After three years working in New Zealand, she can expect around $9,000 of her loan to be written off. Mia can expect to be debt-free sooner under Labour and keep more of her pay.
A new teacher
Aroha starts a teaching degree in 2025 and begins teaching on about $66,000, with a loan of around $40,000. After three years in the classroom here, Labour will cut what she owes by 10%, around $2,400. She would finish repaying her loan sooner and keep more of her salary.
Part of a bigger plan for young New Zealanders
Cutting student debt helps people get ahead once they're working. But young New Zealanders also need good jobs to go to.
Labour will guarantee a job offer for every new nurse trained here in New Zealand, so they can build their future while caring for people here. It means around 2,400 job offers every year.
We'll back small Kiwi businesses to grow and create jobs. And we'll get on with fixing schools and hospitals, creating steady work for local builders, sparkies, plumbers and the businesses that employ them.
Through the New Zealand Future Fund, we'll invest in Kiwi businesses so they can grow, expand and create jobs here at home.
Cutting student debt will help young people get ahead. Investing in jobs will give them a reason to build their future here.
Fully funded, ready to start
Student loans sit on the government books as an asset. When Labour reduces a loan balance, the borrower owes less, and the government writes off some of that asset.
The value of the loan is not simply the total amount borrowers owe. Some loans won't be fully repaid, they're interest free, and repayments can take years. The true value of the loan is called the fair value of the loan, which is lower than the dollar value of the loan.
The first graduates will qualify under the three-year track in 2031, with an estimated cost to government of nearly $40 million a year once fully running. Labour will also fund Inland Revenue to make the change.
Making life more affordable
Cutting student debt is part of Labour's wider plan to make life more affordable. Labour will also:
- Introduce new laws to make price gouging illegal
- Break the grip of the two supermarket giants so smaller stores have guaranteed access to wholesale and can offer fairer prices
- Provide three free GP visits a year
- Freeze fuel tax for three years
- Cap public transport fares at $20 a week in Auckland, Wellington and Christchurch, and $10 a week elsewhere
- Make prescriptions free
- Help households install solar power with no upfront cost, saving around $1,000 a year
How much will my student loan be cut by?
Eligible student loan balances will be cut by 10%. There are two ways to qualify: if you have already finished study and are still repaying your loan, you get the 10% cut on 1 April 2027. If you are a current or future student, you get the 10% cut after staying in New Zealand for three years following the end of your study.
Will my student loan be written off completely?
Graduates who owe $2,000 or less after completing three years in New Zealand following their study will have their remaining debt written off completely.
Who is eligible for the student loan cut?
To be eligible, you must be a New Zealand-based borrower who is up to date with your loan obligations, and you must not have benefited from Fees Free. People who have already finished study and are still repaying qualify for the cut on 1 April 2027. Current and future students qualify after staying in New Zealand for three years following the end of their study.
When do I get the cut if I'm a current or future student?
Current and future students receive the 10% cut after finishing their study, staying in New Zealand, and keeping up with their loan obligations for three years. Labour estimates the first graduates will qualify under this track in 2031.
Does the Fees Free exclusion apply to me?
The 10% cut applies to graduates who did not benefit from Fees Free tertiary funding. If you received Fees Free, you are not eligible for this reduction.
Do I still make repayments based on my income?
Yes. Student loan repayments will still be based on income. People who earn too little to make repayments can still qualify for the cut, as long as they are meeting their obligations.
How much could this save someone in practice?
These are illustrative examples only - actual outcomes depend on individual salaries, pay progression, loan balances and any future changes to repayment settings.
- A graduate nurse starting work in 2028 on about $77,000, with a loan of just under $40,000, could have around $2,000 written off after three years in New Zealand
- A doctor on around $105,000 with a $120,000 loan could have around $9,000 written off after three years
- A teacher on about $66,000 with a $40,000 loan could have around $2,400 written off after three years
How much will this cost, and how is it funded?
The policy will cost nearly $40 million a year once fully running, based on the fair value of the loan reductions rather than the full dollar amount owed, since not all loans would otherwise be fully repaid. Labour will also fund Inland Revenue to administer the change.
Why is Labour doing this?
Student debt can hang over people for years, making it harder to save for a home, start a family or plan for the future. Labour wants New Zealanders who study, work and contribute here to be able to get ahead here, rather than feeling they need to move overseas to build a future.
Owe less. Get ahead. Build your future here.
Better starts now.
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