Student loans to remain interest-free

Student loans will remain interest free but it looks as though they'll be expected to pay them off faster with income and repayment thresholds looking likely to change.

The Prime Minister has told a Wellington business audience the detail will be in the Budget in just over three weeks time but says the moves will save tens of millions of dollars.

But John Key said after the speech there's still no intention to re-impose interest rates on the loans.

Mr Key says to charge interest would be a bit unfair to those who have enjoyed zero interest rates and have built that in to their lifestyle.

Mr Key says as the account stands, 45 cents of every dollar lent is effectively being written off.

He has told a Wellington business audience that the Budget will improve on that.

"We intend to get it closer to 40 cents in the future, by continuing to chase overseas borrowers and through the faster repayments of loans once people have finished their study."

Mr Key has indicated thresholds will be changed meaning that students may have to pay more off their loans over a shorter period.