Election 2026: National pledges lower student loan repayments for graduates staying in NZ, new penalties on Kiwis overseas
New Zealand's National Party has proposed a policy to reduce student loan repayment rates for graduates who remain in the country. Conversely, the plan includes stricter penalties and interest rate hikes for those living overseas to encourage domestic talent retention.
Why it matters
This policy highlights the ongoing challenge of 'brain drain' in smaller nations and the use of fiscal incentives to influence migration patterns.
Christopher Luxon (fourth from left), Nicola Willis (second from left) and Simon Watts (centre) at the Rocket Lab facility in Mt Wellington, Auckland. Photo / Sylvie Whinray
National is promising to lower compulsory student loan repayment rates for university graduates who stay in New Zealand, while increasing annual interest and buffing up penalties for those who move overseas, if re-elected.
National’s finance spokeswoman Nicola Willis said the party would campaign on reducing the compulsory student loan repayment rate to 10 cents on every dollar earned above $24,128, down from 12 cents currently.
Simultaneously, Willis said National would introduce harsher penalties on Kiwis who move overseas, in an effort to discourage defaulting and encourage graduates to stay in New Zealand.
This would result in annual interest on overseas-based balances being increased by 1 percentage point to 5.6%, with tiered penalties for sustained default on top of existing late payment interest rates.
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