Higher loan repayments and cuts to student funding will go ahead as the Government moves to implement its plan announced in the 2012 Budget.

The changes will repayments increased from 10 per cent to 12 per cent and post-graduate students will no longer be eligible for the weekly allowance.

The Government released changes to the student loan scheme during its 2012 Budget announcement.

According to a report released by the Ministry of Education, the total number of borrowers for 2011/2012 has decreased.

In 2012, Inland Revenue received $876.5million in repayments, $75million more than 2011, however, the number of people with student loans dropped by 2.4 per cent.

The report states the recession significantly increased the number of borrowers in 2009 and 2010, as drop in the number of jobs available pushed people to study.

Victoria University of Wellington Students' Association (VUWSA) President Bridie Hood says the changes will send a strong signal to students and graduates that they have no future in New Zealand.

She says unless the Government does something to keep graduates here, the flow offshore would only grow larger.

'National promised in 2008 to stop the bleed of New Zealand's brightest to Australia. The opposite has happened, and we are haemorrhaging, with comparable study fees and higher wages in Australia, our talent is seeking a brighter future offshore.

'When students add up a dire job market with the Government's plans to burden them with even more debt; no wonder they're choosing Wollongong over Wellington.”