IRD News

New service to stop overseas student loan borrowers spiralling into debt

Posted 02 September 2014

New Zealand students now living in Australia are being reminded not to ignore their student loan debt as Inland Revenue expands its latest tool to help with repayments.

PayWay, a secure, internet-based service, helps students pay back their loans online, and from this week over the phone.

Paula Knaap, Collections Manager at Inland Revenue said $2.9 billion is owed by New Zealand student loan borrowers who now live overseas and all of them have a duty to repay their loan.

"Our main message for borrowers who owe money remains the same; you need to understand it is your responsibility to repay your loan even if you no longer live in New Zealand. You may have left the country, but your loan hasn't.

"We want to help stop student loan borrowers getting more into debt. If you don't keep up your repayment obligations, you will be charged with penalties.

"Using PayWay means New Zealand borrowers who now live in Australia can easily pay back their loans in Australian dollars, from an Australian bank account and Inland Revenue bears the cost of the currency conversion," said Ms Knaap.

There are more than 720,000 student loan borrowers, 15 percent of which live overseas.

"With the recent changes to the repayment threshold for overseas-based borrowers, its essential students know how much they owe and what repayments they need to make. "I cannot express enough that it is never too late for any student loan borrower to contact us so we can work with you on a repayment plan to suit your needs, or see how the new legislation may affect you. I encourage everyone to do this.

"Paying back debt on top of existing debt can be avoided. You should start repaying your student loan once you receive an overseas based assessment or earn over the New Zealand wage threshold," said Ms Knaap.

New Zealand student loan borrowers who are living in Australia with an Australian bank account can set up a PayWay direct debit arrangement by calling Inland Revenue's Australian toll-free number on 1800 559 653.