$20m recovered in student loans from overseas

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.

Mr Dunne says the Inland Revenue programme has so far returned $12.20 for every dollar invested, which was outstanding as overseas-based borrowers take considerably longer to pay off their loans than those who remain in New Zealand.

As at April 2012, those borrowers living abroad have loans of more than $2.6 billion, of which $409 million is overdue for repayment.

“The median repayment time for overseas-based borrowers is 13.9 years, compared with 4.6 years for borrowers resident in New Zealand, so clearly this scheme is well targeted in terms of encouraging overseas-based graduates to address their obligations,” Mr Dunne says.

“More than 6000 borrowers have now made repayments since the initiative began. Of those, 18 borrowers have paid more than $50,000; the average for these borrowers was $69,000 towards their loan.”

Mr Joyce welcomed these early results saying improving repayment rates for overseas borrowers was a priority for the Government.

“The initial pilot phase of this project has proven the worth of chasing student loan debtors who are overseas and not meeting their obligations,” Mr Joyce says.

“The Government will continue to ramp up its debt collection efforts to ensure those overseas pay off their loans and help contribute to further investment in the tertiary education system that trained them.

“As we have said before, action will be taken against borrowers who deliberately choose to avoid their responsibilities.”