Photo: RNZ / Rebekah Parsons-King
Tens of thousands of people past retirement age are still paying off their student loans, government figures show.
Christchurch woman Sarah, who does not want to be identified, has been paying off a student loan for much of her adult life.
She initially completed a bachelor's degree in sociology and geography and has an event management qualification, too. She graduated with about $40,000 in debt.
She has since paid that down to $5000 but is now facing the prospect of adding to it again so that she can retrain as a teacher.
"I do find it demoralising to be 40 still with a loan. I feel like I'll never get ahead and I made so many decisions that just did not set me up to be financially successful."
Financial mentors say student loan debt can stick with people for a long time.
One Auckland financial mentor said people who had been on low incomes through their lives were sometimes shocked to discover their superannuation was being docked to repay a student loan.
"They wouldn't be repaying it on a benefit ... I don't think people realise when they go on to a pension they have to start repaying their student loan from a pension.
"When I've said 'look they just don't have any money' you get told 'they have to pay it back sometime'. I think lots of people who haven't earnt a lot of money after studying will be quite surprised about that."
She said half to three-quarters of the pensioners she dealt with had a student loan.
Financial coach Shula Newland said someone with a student loan could also find that income from KiwiSaver and other investments was used to pay it off.
She said beneficiaries were often encouraged to study as a way to get off the benefit, but they could be left with a loan for a qualification in a field that did not pay well.
It was possible to apply to have student loan repayments put on hold on hardship grounds, she said.
Fincap senior policy adviser Jake Lilley said there should be a mechanism for people collecting debt to look at the wider picture of what was being achieved.
"To take a step back and say 'hang on a minute what are we trying to achieve here overall?' We want this person to be able to live a comfortable life and not having flow-on problems from poverty that arises when you can't afford things and you end up with a bad outcome that has a cost attachment with that, [like] hospitalisation ... if Studylink debt leads to someone not turning on the heater if they need it."
At present, people are required to make payments of 12 percent of every dollar earned over $24,128 a year. A single person living alone would receive a pension of just over $31,500 a year.
Government data showed at 30 June 2023, there were 21,710 student loan borrowers aged 65 and over. Of those, just under 16,600 were New Zealand-based.
Sarah said she was concerned about the prospect of having a loan stretching into the future.
"Previously I treated it like a tax that I'd just have. Now I'd like to have the money instead but if I want a better career option, I need to do it."