A Kiwi living overseas who refused to repay his student loan has been arrested at the New Zealand border.
This is the first time the sanction has been used.
A person has been arrested at the New Zealand border after refusing to pay his student loan. File photo.
The man was detained on Monday while trying to leave the country, reported other media.
He has lived overseas since 2004 and has a student debt of more than $20,000.
He was due in court again on Friday after being bailed to his in-laws' house on Thursday.
In July 2015, Inland Revenue said it was looking into 20 student loan defaulters for possible arrest if they attempted to return to the country.
As part of Budget 2013, the Government said it was stepping up a campaign to improve repayment, including giving the power for border arrests for the "most non-compliant" defaulters.
New legislation in 2014 allowed an arrest warrant to be issued for overseas-based borrowers who persistently default on repayments and are caught trying to leave New Zealand after a visit home.
The District Court can then prevent the offender from leaving the country until they resolve their debts.
Orders can involve: paying the amount in default or making arrangements to pay that amount; giving security for the payment; not leaving the country without permission; surrendering any travel documents.
The sanction was intended to 'sent a clear message to all borrowers that non-compliance is unacceptable and there are consequences for ignoring repayment responsibilities”, according to IRD.
5 comments
Has to be a better way.
Posted on 22-01-2016 15:04 | By morepork
Obviously, if you take out a loan, you must repay it. But it seems a shame to me that we have a generation of young people who have to mortgage their future in order to get an Education, then find that having received that Education, it is no guarantee there will be a job that might enable them to honour their obligation, so they are saddled with a huge debt burden for years of their lives. In the old days, you tried for scholarships that paid your tuition, then you worked at things like haymaking, construction, anything really that would give you some cash to cover your expenses for the coming term. While the current system is better in what it provides, the cost to the recipient may be more than is reasonable or even viable. Can't we provide ways for students to reduce their debt by communal activity?
Learn your Lesson
Posted on 22-01-2016 15:20 | By Conzar
If your planning on defaulting on a student dept from Country A and moving to Country B. Never go back to Country A. In this case, NZ. Lesson 2, if you have 20K in student loans and can't find a job, welcome to the new future of technological unemployment. Be prepared to pay off your debt in debtors prison. Lesson 3: the global financial collapse part 2 is well underway and we will see many more collage grads unable to pay their loans not to mention the impending home owners who won't be able to pay either. Thanks to NZ laws, those people too will go to jail as they can't just walk away from their mortgages.
Its a privilage
Posted on 22-01-2016 16:06 | By Twinkle Toes
Morepork, going to university is a privalage. Some people cannot afford it and some will not have the university entry requirements. These students know exactly what they are getting themselves into with having a student loan hanging over there heads. Education is free but wanting to go to university is a choice and not a must.
Short sighted
Posted on 23-01-2016 07:15 | By maildrop
The system seems to be that students get a massive debt over them, the government charges huge interest, they bugger off overseas, the government then imports people with skills to replace them. Stupid. The amount owed is nearly as much as the half a billion owed in traffic fines. I don't see the government doing much about that, or arresting people, or how about taking their cars off them? This is just political jousting. Nobody is going to prison for not repaying it and quite right too. If a country wants an educated and skilled workforce it should pay for it. Only if you then go overseas should you have to pay it back. That way skilled people would be more inclined to stay. Now those who owe traffic fines, they can bugger off overseas, that way the roads would be twice as safe.
@Twinkle Toes
Posted on 23-01-2016 19:01 | By morepork
I disagree. All NZers have a RIGHT (NOT a privilege) to further their Education. Yes, it costs money, and those costs must be met, but we should make it as affordable as possible, to ensure that nobody is excluded. It is investment in the future of our nation. I am NOT condoning people getting a loan then not paying it. Rather, I'm saying we need to provide more ways for them to cancel their debt and it doesn't just have to be about money. Students who take up volunteer or community work in the holidays should be able offset that against repayment of their loans, for example. Graduates with skills we need, who stay here, should also get a break on their loan repayment (as Maildrop suggested). Conzar paints a bleak picture, but his points are close to home. Education has to be affordable for ALL.
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