People who have finished their tertiary studies but are still paying off student loans are likely to be hit with an annual administration fee.
A fee of $40 or $50 is one of several measures signalled by Tertiary Education Minister Steven Joyce yesterday.
A final package will be announced in the Budget later this month.
While the Government remained committed to interest-free student loans, "significant steps" were needed to reduce the spiralling costs and use of the scheme, Mr Joyce said.
More than 560,000 people have student loans, totalling $9.1 billion.
Statistics released yesterday by StudyLink showed more students were borrowing more money, with total loan drawings increasing 20% on this time last year.
Students already pay a $50 annual administration fee each year they are studying and Mr Joyce indicated that might rise to $60.
The Government was also looking at imposing a new fee for those who had left study but were still paying off their loans, a move expected to bring in $15 million in the first year.
The great impact would be on those who took many years to pay off their loans, usually because they were overseas, Mr Joyce said.
"The average time for people who remain in New Zealand to pay off their loan is four years, which is less than I would have thought, so the fee shouldn't be too much of a problem for them."
Pressure was also going on Inland Revenue and Studylink to reduce administration costs, he said.
Other cost-saving measures sig-nalled include a two-year wait for Australian and new residents before they can access loans, re-stricting the number of years loans can be accessed to six or seven, and cutting off loans to those who fail more than half their courses over two years.
Green Party associate tertiary education spokesman Gareth Hughes yesterday called the new fee "charging interest by stealth", saying people in employment already had to pay their loans directly from their pay packets and the fee seemed "unnecessarily punitive".
New Zealand Union of Students' Associations co-president David Do said the Government had effectively neutralised its election promise of a 10% bonus for making voluntary loan repayments.
"If a borrower pays $500 to get the 10% bonus, this $50 account fee will snatch that away."
Mr Joyce said while there there had been "standard level opposition" to the proposed fee, the general reaction had been good.
"I get the sense people think a fee is fair. There has not been too much push back."
