Student loan holders will have more money taken from their wages or salary each week as the government tightens up repayments to recover billions of dollars in outstanding debt.
Currently, most loan holders earning more than $19,084 annually from their main source of income repay 10 cents in the dollar on their student loans.
Prime Minister John Key on Tuesday said the repayment will increase, while the income threshold could also be lowered, as part of the government's "rebalancing" of the tertiary education sector in the May 24 budget.
"Effectively they'll be asked to repay slightly quicker and that'll be good news, in fact, for them because it means they'll pay off their student loan faster," Mr Key said.
Mr Key says the government will keep student loans interest-free, despite opposition from business groups and economists - saying it would be "really challenging" to roll back.
"There's over a half a million New Zealanders that have a student loan. I think they've banked into their financial equation now that there won't be interest on that, and that would have a dramatic impact on the amount of time it would take them to repay their loan," he said.
Tertiary Education Minister Steven Joyce will announce more details on the tertiary education policy in the coming days, with changes to student allowance eligibility expected.
Mr Key also confirmed this year's budget would be a "zero budget", with the government's goals including crime reduction, cutting welfare dependency and improving education results.
Health and education will both receive new funding, while the government also faces an upfront spend to roll out its welfare reform package.
The government will spend more on research and innovation and while some areas of financial assistance will be more targeted, Working for Families and KiwiSaver tax credits were both safe.
More changes to the tax system will also be included in the budget.
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