It was one of Labour's election sweeteners and from Saturday night those who stay on and work in New Zealand after studying will save thousands on their student loans.
Student debt stands at nearly $7 billion and Labour's pledge to write off the interest was dismissed by some as an election bribe. But the policy looks like it is already achieving its aims of keeping those with tertiary skills on-shore.
"I'm not going overseas because...now I have an incentive to stay here" says student Niels Meirnderts.
Around 400,000 people currently have loans but they will need to be in New Zealand to take advantage of the scheme.
For a graduate with a $15,000 loan who earns $35,000 a year, the scheme will mean they save around $7,000.
However, some students say it is still not enough.
"I think...it would be better if they were completely free," says a student.
It is a plan that National said would backfire because more students would take up the interest free loan bargain. However figures out this year show a rise of just 6%. And it looks like National may now be keeping an open mind.
"If it's the case that they don't go out and borrow in big numbers, maybe we can leave the scheme as it is," says National's education spokesman Bill English.
The scheme is expected to cost the taxpayer $300 million, but for most students it is a chance to breath a sigh of relief with the burden of interest lifted.
