Select Committee interested in amnesty period for borrowers
Media Release – Friday 18 October
Select Committee shows interest in amnesty period for borrowers
The latest proposed round of changes to Student Loan legislation has prompted a discussion in the Finance & Expenditure Select Committee about a different approach to drawing money back to New Zealand from Overseas Based Borrowers – including the idea of a one-off amnesty period that would work best if held within the next year.
Select Committee member Winston Peters indicated support for replacing a punitive approach with a more carrot-driven approach in direct response to a submission on the Student Loans Scheme Amendment Bill made by the NZ Union of Students’ Associations (NZUSA) this week as the legislation was being rushed through Parliament.
NZUSA has been fielding an increasing number of concerned calls and emails from former tertiary students now working or living overseas for whom the policy to arrest defaulters at the border has created a climate of fear, especially for borrowers who have seen their initial debt balloon out of control, often with little recourse for negotiating a reasonable plan for repayment and, until recently, limited options to access easier ways to make payments. Many of the calls have arisen from concerns being raised by parents.
Initiatives to come to the assistance of Overseas Based Borrowers by NZUSA include partnering with NZForex to facilitate repayments without transaction fees and, as a neutral third party, initiating a survey for collecting data from people being targeted by the government’s policy direction. The survey link is http://www.surveytool.com/s/S48C82F9C5
In addition to highlighting a number of longstanding and cumulative flaws in the overall scheme to the Select Committee this week, NZUSA submitted that Inland Revenue should have the capacity to run a campaign that could write-off fines and accumulated late-payment interest in favour of commitments from Overseas Based Borrowers to meet their obligation to hasten repayments of the principal of the loan.
It was suggested that a managed ‘amnesty campaign’ would be a far more successful approach than ones currently being taken as it would immediately gain a more positive profile than the prospect of arresting defaulters at the border, and would also promote a less negative level of re-engagement with expat New Zealanders.