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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.

The Student Loan Scheme Amendment Bill (No. 3), introduced in August 2013, passed its final stages in Parliament today.

The new legislation includes tougher measures to deal with student loan borrowers who persistently refuse to make repayments and introduces higher repayment obligations for overseas-based borrowers to assist them to pay off their loans sooner.

The Student Loan Scheme Amendment Bill (No 3), which changes repayment obligations for overseas-based borrowers and tougher measures for persistent non-payers, passed its second reading in Parliament today. 

“This legislation continues the Government’s focus on providing fairness to the taxpayer through proper oversight of the student loan scheme,” Revenue Minister Todd McClay says.

Budget 2013 will target overseas-based student loan borrowers with new initiatives to increase repayments and reduce defaulting, Tertiary Education, Skills and Employment Minister Steven Joyce and Revenue Minister Peter Dunne say.

“Overseas-based borrowers are continuing to let the side down with slow repayments and high levels of loan defaults, compared to those who stay in New Zealand and pay off their loans,” Mr Joyce says.

The latest student loan statistics show that the gap between the repayment rates of New Zealand-based borrowers and overseas-based borrowers continues to grow, despite overall lifts in the number of people paying off their loans.

Overseas-based borrowers make up 60 per cent of the 84,562 borrowers in default as at March 31 this year, despite comprising only 15 per cent of the borrowing population. They are responsible for 82 per cent of the $520 million currently in default.

Tertiary Education, Skills and Employment Minister Steven Joyce and Revenue Minister Peter Dunne today welcomed significant progress in reducing the cost of student loan lending.

“We are committed to interest-free student loans, and want a long–term affordable scheme for both students and taxpayers,” Mr Joyce says.

“When Labour took the interest off student loans, the write-off of student loans ballooned out to 48 cents in the dollar.

The Government’s programme to collect overdue student loan repayments from overseas-based borrowers has now brought in $20 million, with a further $2.9 million under payment arrangements, Tertiary Education, Skills and Employment Minister Steven Joyce and Revenue Minister Peter Dunne say.

The scheme began in late October 2010 as a pilot targeting 1000 Australian-based borrowers and has recently been extended to 57,000 borrowers, largely in Australia and the United Kingdom, over the next two and a half years.