Student loan debt breaks $1B mark

New Inland Revenue Department figures show a massive milestone has been achieved – but don't expect a party in celebration.

According to the figures released by the IRD, the amount owed in defaulted loan payments by Kiwis living at home and abroad reached $1,073,815,786 by the end of June of this year.


New Inland Revenue Department figures shows the amount of student loan debt in default has surpassed the $1 billion mar. File Photo.

A little over $982 million of the debt is spread across 80,622 offshore borrowers, with the remaining 24,108 debtors living in New Zealand. The top 10 biggest debtors owe more than $300,000 each and are living overseas.

Speaking to Fairfax, IRD business owner team principal advisor Sara Engel says the department uses a number of methods to recover debts

This includes easier processes for people to make repayments from overseas, improved info-sharing with other Government agencies like the Department of Internal Affairs, while legal action or arrests were a 'last resort”.

A new arrangement between the IRD and the Australian Tax Office, which come into effect next month, will also allow the department to ask for the contact details of expat-Kiwis living across the ditch who fail to make repayments.

Repayment amounts are based on borrowers' student loan balance, not their income.

Interest accrues on student loans once a borrower lives overseas for more than six months.

Repayment holidays of up a year are available, but must be signed off within 183 days of leaving the country. Borrowers not on a repayment holiday must make two repayments each year, with the next due date this Friday.

Currently, if a borrower fails to make a repayment they will be charged late payment interest of 4.8 per cent.

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2 comments

Hmmmm

Posted on 27-09-2016 10:52 | By How about this view!

I guess the outstanding debt within the country is too hard to recoup is it? Getting free money these days is far too easy..... But then we come up against your "Rights" to have an education, don't we! Puts me in mind of a case where a student got a scholarship to study a trade at the local poly, all course fees, a living allowance, transport and a free kit of tools were handed to him. He turned up once, spent all of the living allowances etc and sold the tools and course literature..... sometimes, life is too easy if you are unemployed, because there's always ways to rip off the system and get someone else to make excuses for your behaviour. Undoubtedly in this instance of outstanding debt, it's a government issue and not a personal responsibility issue.


Good grief

Posted on 27-09-2016 15:41 | By Kenworthlogger

Make them pay. Clearly if they can afford to pay for a airline ticket out of NZ then they can afford to make payments on their debt to all NZ tax payers.


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