Overseas student loans collection hits $100mTertiary Education, Skills and Employment Revenue
Over $100 million of additional taxpayer money has now been collected from overseas-based borrowers in an initiative that will help keep the scheme sustainable for future students and taxpayers, Tertiary Education, Skills and Employment Minister Steven Joyce and Revenue Minister Todd McClay say.
The overseas-based borrowers initiative began as a small pilot programme in 2010 and has since expanded to comprehensively target borrowers in default of their repayment obligations across Australia and the United Kingdom, plus parts of Europe, North America and Asia.
Mr Joyce says that overseas-based borrowers are responsible for around 87 per cent of all overdue loan repayments despite representing only 21 per cent of total student loan debt.
“They need to understand their loan doesn’t just go away when they go offshore,” Mr Joyce says.
“It is important that student loan borrowers meet their obligations to New Zealand tax payers who have supported their tertiary study wherever they are in the world, so we can provide the same support for the next generation of students.
“Prior to the Government starting this initiative, overseas-based debt was in the too hard basket. We still have a long way to go to get overseas-based borrowers up to speed, but passing the $100 million mark is an important milestone.
“The initiative has so far returned around $11 for every $1 invested in it.”
Mr McClay says the Government is committed to making it easier for people to repay their loans.
“Inland Revenue has set up toll-free phone numbers for borrowers living in Australia and the United Kingdom. Overseas-based borrowers can also choose from four online money transfer companies offering fee-free services, and when they use their credit or debit card, Inland Revenue will waive the convenience fee,” Mr McClay says.
The initiative uses a range of tools such as directly contacting borrowers, working with private debt collection companies to assist in tracking, tracing and collecting from borrowers in default, advertising and taking legal action against those who continue to ignore their repayment obligation.
“I want to emphasise that the arrest at the border provision is very much a measure of last resort, it will only be used for those who, despite having the ability to pay, consistently and deliberately refuse to do so,” Mr McClay says.
Inland Revenue has received over 3000 calls from overseas based student loan borrowers since the Student Loan Scheme Amendment Act 2014 was enacted on 7 March.