$200 million repaid through overseas student loan borrowers   30 Jul 2015

Hon Steven Joyce
Minister for Tertiary Education, Skills and Employment
Hon Todd McClay
Minister of Revenue

30 July 2015

$200 million repaid through overseas student loan borrowers scheme

Overseas-based Kiwis with student loans have collectively repaid more than $200 million in additional repayments towards their outstanding balances through the overseas-based borrowers initiative, Tertiary Education, Skills and Employment Minister Steven Joyce and Revenue Minister Todd McClay announced today.

Inland Revenue has been running a campaign since late 2010 to encourage more student loan borrowers living overseas to repay their loans. In the year to June $185 million was collected from overseas-based borrowed including $79 million directly as a result of the overseas-based borrowers initiative.

“Reaching $200 million in additional repayments since 2010 is a great milestone for the programme. This is all money we wouldn’t have collected if we had continued on the old way of ignoring student debt owed by people overseas,” says Mr Joyce.

As at May 2015, there are more than 730,000 student loan borrowers, 15 per cent who live overseas. It is estimated that $3.1 billion is owed by those borrowers living overseas.

“Just because people have left New Zealand it doesn’t mean they can leave behind their debt. The New Zealand tax payer helped to fund their education and they have an obligation to repay it so the scheme can continue to support future generations of students,” Mr Joyce says.

The Government has now set an ambitious target of collecting $100 million in a single year through the overseas-borrowing initiative.

“We'll achieve that by targeting first time defaulters, tracking and tracing more borrowers overseas and using legal action when appropriate,” says Mr Joyce. "We're hoping to hit the $100m in a year mark at some point over the next two years."

In the past year, 20 new cases of Australian based borrowers were referred for legal enforcement, 19 of these cases have had Notices of Proceedings served and three of these borrowers have now paid their arrears in full.

Inland Revenue can issue a warrant for an arrest for people who persistently default on their re-payments, IRD is currently monitoring 20 people they might consider such intervention with. IRD has attempted this before and in each case the borrower has made re-payments before the arrest.

Minister of Revenue Todd McClay says Inland Revenue’s investment in following up borrowers who have fallen behind on their student loan repayments is paying significant dividends.

“Borrowers can register for a myIR online services account so they can see their current loan balances. We also have a student loan calculator to help borrowers see how soon they can pay off their loan especially if they make extra repayments,” Mr McClay says.

“An information sharing arrangement with the Australian Tax Office becomes operational from mid-2016, Inland Revenue will be getting a fresh stream of contact information on borrowers living in Australia so now is the opportunity for defaulting borrowers to sort out their loans with Inland Revenue. They shouldn’t have to wait for IRD to contact them. For those defaulting borrowers who don’t call, their contact details will start coming in from next year and Inland Revenue will follow these up,” says Mr McClay.

“There are many ways for people to repay their loans, wherever they are living. If they're in Australia, they can set up PayWay direct debits by calling us. This allows borrowers to easily pay back their loans in Australian dollars, from an Australian bank account and Inland Revenue bears the cost of the currency conversion.”

There are also fee-free payment options for borrowers living anywhere in the world through online money transfer companies.

ends

Add a comment