Revenue Minister Judith Collins and Tertiary Education, Skills and Employment Minister Paul Goldsmith say they are encouraged to see a marked increase in overseas student loan defaulters contacting Inland Revenue and taking steps to pay off their loans.
Since December 2014 there has been a 66% increase in the number of overseas borrowers who are behind on their payments getting in touch with Inland Revenue.
In the same period there has been a 32% increase in the number of defaulters who are now making a dent in their loan. Repayments by those who defaulted increased by $24.5 million for the year ended December 2016.
“Since the overseas-based borrower compliance initiative was established in 2010, borrowers have made an estimated $361 million in additional repayments, as of December 2016, with more than $100 million of that in the last financial year,” says Mr Goldsmith.
“We know that repayment times for overseas borrowers are much longer than for those residing in New Zealand, and that they account for more than 90 per cent of the roughly $1 billion that is in default. It is vital for overseas borrowers to make a plan with Inland Revenue to repay their loan.”
“Moving overseas is not a way to hide from your student loan obligations,” says Ms Collins.
“I’ve been pleased to see the recent data match arrangement with the Australian Tax Office proving successful. Inland Revenue has been provided with the contact details for almost 57,000 borrowers, which has already resulted in some large payments to Inland Revenue.”
Ms Collins says some borrowers have stumped up with significant lump sums after being contacted while many more have made arrangements to get back on track.
“I strongly advise any student loan borrower planning their OE to contact Inland Revenue before they leave. Sorting out a workable repayment plan in advance could save headaches later on.”
“The significant investment made by taxpayers in tertiary education and the student loan scheme means that around 82 per cent of the cost is shouldered by taxpayers, so it is important that borrowers make arrangements to repay their loans,” says Mr Goldsmith.