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May 4, 2014 | by  | in News |
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Police See Students, Government See Dollars

The Government says it has collected over $100 million from harsh new rules for overseas-based student loan borrowers, but NZUSA has slammed this as “hopelessly misleading and untrue.”

Since 2010, when the overseas-borrowers recovery programme began, the initiative “has returned $11 for every $1 invested in it,” Minister of Revenue Todd McClay said.

New rules came into force on 1 April, with Police now able to arrest overseas-based borrowers who have accrued serious debt at the border.

At that time, the IRD set up toll-free phone numbers for borrowers living in Australia and the United Kingdom. Inland Revenue has received over 3000 calls from overseas-based student loan borrowers since March.

However, NZUSA President Daniel Haines said that the money returned was not necessarily because of the programme, and that the Government had not mentioned the $3 billion which is owed by ex-students currently living overseas.

“The fact is that the numbers of debtors, the amount of debt, the amount of debt in default and the numbers of overseas-based borrowers in default have risen under this government. These numbers will continue to rise because recent policy which beats up on students is a missed opportunity to address the real issue of student debt,” Haines said.

Though the IRD has failed to clarify exactly what constitutes “serious” debt, Minister of Tertiary Education Steven Joyce has said that anyone with loan debt exceeding $15,000 who had not responded to IRD requests for repayment could expect to qualify.

The Government has claimed that cracking down on overseas-based borrowers is an advantage to current students.

“It is important that student loan borrowers meet their obligations… so we can provide the same support for the next generation of students,” Mr Joyce said.

However, Haines said that recent changes have made it harder for students to survive.

“Although student loan repayments are increasing, due mostly to domestic graduates having their repayment obligations increased, this government continues to make cuts to student support,” Haines said.

The Numbers
– $3 billion is currently owed by overseas-based borrowers, out of $13 billion total student loan debt.

– 87 per cent of overdue loan repayments are from overseas-based borrowers – $550 million.

– There are 101,095 overseas-based borrowers, who owe $30,000 on average.

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