Legal framework - Student Loan Scheme

There are also a number of statutes that provide legal authority for some aspects of the Student Loan Scheme. For a brief description of these see:

• Statutes

The policy decisions (as agreed to by Cabinet and recorded in Cabinet Minutes) set out the eligibility and entitlement "rules" - who can access a Student Loan and on what basis.

The Student Loan Scheme was introduced in 1992. The Government did not introduce legislation to provide a statutory basis for the policies on who could take out a Student Loan and how much they could borrow. It decided that as long as the Crown reserved the right to change the loan contract, contract law would suffice and therefore legislation was not required.

These policy decisions are recorded as decisions of Cabinet in various Cabinet Minutes. They are described and explained in this Student Loan manual.

Student Loan Scheme (Details of Borrower's Contact Person) Regulations 2012 - these regulations specify what details can be collected about the borrower's contact person.

Student Loan Scheme (Repayment Percentage) Regulations 2012 - these regulations specify the repayment percentage deduction, currently 12% for each dollar of income over the repayment threshold.

Student Loan Scheme (Repayment Threshold) Regulations 2020 - these regulations specify the annual repayment threshold from 1 April 2021 to 31 March 2024. A repayment deduction of 12% is made for each dollar of income over the repayment threshold.

Student Loan Scheme (Repayment Threshold for 2024-2025 Tax Year and Subsequent Tax Years) Regulations 2023 – these regulations specify the annual repayment threshold starting from 1 April 2024.

The Student Loan contract is a contract between the student and the lender (the Crown).

The loan contract, in accordance with the Student Loan Scheme Act 2011, sets out the terms and conditions for accessing the Student Loan Scheme including, eligibility and the collection by Inland Revenue of money borrowed under the scheme.

Section 13 of the Student Loan Scheme Act 2011 sets out what information must (as a minimum) be disclosed in the contract.

If there is any conflict between the Student Loan contract and any legislation about Student Loans, such as the Student Loan Scheme Act 2011, the legislation will prevail.

For more information see:

• Student Loan Contract

A contract exists when:

• the offer of something of value by one party is accepted by the other party
• there is an intention to create a legal relationship and
• there is certainty over the terms of the legal agreement

The Loan Entitlement Advice (LEA) letter is both the offer of something of value and further details of the terms of the agreement.

A student is considered to have accepted the offer, including the terms, if the Student Loan is not cancelled within 7 working days after the date the initial LEA letter was issued.

For more information see:

• Loan Accounts

The Annual General Adjustment (AGA) is the name given to the annual increase in the rates and some thresholds of various social assistance payments (including Student Loan Living Costs).

Any changes to the Student Loans Living Costs take effect from 1 April each year, reflecting any upward movement in the Consumers Price Index (CPI).