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April 8, 2013 | by  | in News |
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An Outcome on Income

Loan default rates to peter out, dunne hopes

A deal Dunne in Parliament last week will crack down on student-loan defaulters using new methods, effective immediately.

The Student Loan Scheme Amendment Bill (No 2) passed under the watch of Revenue Minister Peter Dunne, and will allow Inland Revenue and Customs to share data to identify and locate defaulters.

“This will ensure greater fairness by including income that is currently outside the current definition—such as income from trusts,” said Dunne. “We have one of the most generous student support systems in the world, but it needs to be fair for taxpayers, and this bill helps achieve that.”

The Bill also synchronises the definition of income used for students’ loans with those used for tax credits and other social policy programmes. These changes will take effect from April 1 2014.

The broadened definition of income will save $3.1 million dollars over four years. It is unclear which specific groups will be affected by the changes.

These legislative changes are the latest of Dunne’s ongoing efforts to increase repayment rates. The Member has previously proposed using repo men to collect student debt, and tried to sweet talk students to not be scared to come home.

Two years ago, Victoria’s late Sir Paul Callaghan launched the Heroic educated Kiwi expatriates (HeKe) scheme, to encourage overseas debtors to repay their loans. There were 97,392 overseas-based borrowers at the start of 2012, 47,036 of which had defaulted and owed over $300 million.

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