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Legal action for expat student loan defaulters

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Wed, 01 Jun 2011 8:39a.m.

Those targeted will be expats owing “significant sums of money”

Those targeted will be expats owing “significant sums of money”

Authorities looking to recover millions of dollars in unpaid student loans will begin legal action against hundreds of New Zealand expats.

Letters will be sent to Australia-based defaulters warning of the legal action that will be undertaken as a result of their failure to pay up, the New Zealand Herald reported.

It is the first step toward court proceedings and a possible bad credit rating for the expats if repayments are not made.

Those who are “seen to be deliberately flouting their opportunities to pay back” their loans will be targeted, Tertiary Education Minister Steven Joyce told the newspaper.

Also targeted will be those owing “significant sums of money”.

Mr Joyce told the New Zealand Herald people based overseas are taking on average 14 years to pay back their debts.

“That affects the sustainability of the whole student loan system.”

A campaign against defaulters in Australia began in October last year, at which time a total of $325 million was owed to IRD in overdue student loans.

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Comments

09 Jun 2011 10:06p.m.

mozzie wrote:

This is why many kiwi's left NZ to try to pay it off because of the great pay rates there, I am one of the lucky one's who found a great job overseas and have paid nearly all of my loan back as I would have never done it in NZ, and as for the whinjer's on here moaning about people having to pay it all back you must be the dumb dumb's that couldn't get past primary school to get to Uni, I suggest you get off your fat lazy a@#'s and do something about the economy before we overseas folk have to bail you out.

08 Jun 2011 08:46a.m.

alien wrote:

actually alan you can thanks to the agreements signed with australia

07 Jun 2011 10:18a.m.

Carlos wrote:

.....the government could also cancel their passports if they don't pay up their loans ?!

07 Jun 2011 08:01a.m.

Mat wrote:

This is such an amazing amount of posturing by the government. I am not arguing that people with student loans shouldn't pay them back. What I'm arguing is that the cost:benefit ratio is not going to be successful. This is a campaign based on misleading numbers. According to what they've said, around 15% of students go overseas on a "permanent" basis and don't pay their loan back. I was out of the country for a year, so I had to declare myself as being "permanently overseas" to IRD, when that was never the case. And I have a student loan. So, according to national, I went permanently overseas and didn't pay my loan back in that time (because of the IRD loan repayment holiday which you can take), so I'm part of that 15%, despite being back in NZ. And seriously, do people actually believe that more than one in ten people leave NZ and never return? We all still have friends and family in New Zealand, and do return at some point, so why not target people who have defaulted on loan payments when they try to leave NZ again? Surely it'd be cheaper than hiring debt collectors and going through court procedures across boarders.

06 Jun 2011 01:11p.m.

Bob wrote:

I don't see how this is going to work. as a result of court action, the loan defaulter will be ordered to pay the outstanding loan balance. Who has a spare $70 - $80,000 laying around that they can just pay off the loan when the courts say to do so? The amount of money it will cost to drag the defaulters through the courts compared to the returns probably won't be worth it. The only logical thing to do here seems to be to ensure the money is payed before allowing the ex students to permanently leave the country in the first place. This whole thing is a good idea in principle but will be nearly impossible to enforce. Something has to be done, this just seems like it hasn't had much thought go into it, Only so the government is seen to be doing the right thing.

06 Jun 2011 10:49a.m.

Carlos wrote:

Good, bloody free-loaders !

01 Jun 2011 02:49p.m.

Dianne wrote:

Abt time IRD. What about the ppl that have since married after they took there loan out or changed there name will you beable to track them down?? Bloody hope so. No of one in particular that has since got married & has never payed a cent.

01 Jun 2011 12:37p.m.

Anna wrote:

Great, next please ask the parents who have deserted their children for a life overseas to start contributing towards child support. Perhaps Revenue Minister Peter Dunne could tell us who owes more (students vs parents), and when the promised release of the summary of the main themes of public submissions on the Child Support review will appear.

01 Jun 2011 12:22p.m.

paul Bilski wrote:

I escaped to oz because 3 quarters of my wages were being taken for child support, student loans and fines. after 6 years my child support of $40,000 is paid. I own a house and am now attempting to pay my student loan. I wouldnt own a house and id still be struggling with child support. my student loan jumped from 20,000 to 70,000 over the last 10 years! when i took out the loan, it was stated that this loan would never affect my credit rating. lucky ive bought a house already, but i have a morgage and 70 grand will take long time to pay off as it will blow out to 200,000 by the time its payed off. no wonder everyone is leaving n.z

01 Jun 2011 12:18p.m.

John wrote:

This really looks like meaningless political posturing. $325 million is actually comparatively little, given that the cost of collecting this money is going to be very high, and they are unlikely to recover all of it. The government seems to be trying to appear to be doing something by doing almost nothing at all in this case - it fits with the current rhetoric based upon the notion that students, single parents and the unemployed are somehow getting rich off the back of "hard working New Zealanders", which is also a dubious fiction, but a separate issue. The saddest part is that the people taking this action didn't pay for university, and now they are criticising people for taking too much time to pay off the enormous loans that reflect the high cost of tertiary education.