Interest-free student loans will be available to borrowers in Niue, the Cook Islands, Tokelau and the Ross Dependency under law changes passed by parliament.
The requirement is that they have to be present in one of those countries - known as the Realm of New Zealand - for at least 183 consecutive days.
"This is good news for these borrowers and will encourage people from these countries, which share a special relationship with New Zealand, to return home and contribute to their countries' futures," Revenue Minister Peter Dunne said.
The Student Loan Scheme (Exemptions and Miscellaneous Provisions) Amendment Bill also extends loans to students who are furthering their education overseas through full-time study under a formal exchange programme or a formal agreement between New Zealand and overseas education providers.
This includes post-graduate study that can't be completed in New Zealand.
Other changes in the bill allow Inland Revenue to increase the standard repayment deduction rate from 10% to 15% when borrowers have failed to have the correct deductions made, restoring the hardship relief provisions to reflect their original intention, and making loans interest-free for borrowers who return to New Zealand and fully repay their loan before they have been back 183 days.
