Hon Steven Joyce
Minister for Tertiary Education, Skills and Employment

Hon Michael Woodhouse
Minister of Revenue

4 April 2016

Boost in overseas student loan repayments

Tertiary Education, Skills and Employment Minister Steven Joyce and Revenue Minister Michael Woodhouse have welcomed a further boost in repayments from overseas-based student loan borrowers.

Over the first two months of this year there was a 31 per cent increase in repayments by overseas based borrowers over the same period in 2015. In January and February this year $29.7 million was received from overseas-based borrowers, compared with $22.7 million in January and February last year.

There was increased communication from overseas-based borrowers as well. Emails to Inland Revenue were up 62 per cent over January and February and phone calls increased 55 per cent.

“There was definitely a much higher level of activity at the start of this year, with Inland Revenue receiving over 20,000 additional repayments compared with last year,” Mr Joyce says. “February was also a record month for lump sum payments that cleared loans in full. More than $2.2 million was paid, clearing 103 loans outright.”

“Inland Revenue believe that the publicity around the first arrest at the border has contributed to the increased activity. It’s likely that a number of people were spurred into action. It’s just a pity that it takes these sort of steps to encourage some people to meet their obligations to taxpayers so we can continue to support future generations of students.”

“Around 20 people are currently being actively monitored by Inland Revenue for possible arrest when they return to New Zealand. Of the 112,390 overseas-based borrowers, 70 per cent are currently in default. Anyone with outstanding debt should contact Inland Revenue to organise a repayment plan, or if they’re unable to make repayments they can apply for a hardship grant.”

In the financial year to June 30 2015, the net amount repaid by overseas borrowers totalled $184.7 million. Already this financial year repayments by overseas based borrowers have reached $133.8 million at the end of February.

The Government has been running an overseas-based borrower compliance initiative since late 2010. The programme uses a range of tools to target borrowers in default, and is on track to reach its current target of lifting payments by overseas-based borrowers by $100 million a year.

“From July this year we will have an information sharing agreement with the Australian Tax Office which will allow information on student loan borrowers living in Australia to be shared with Inland Revenue. The majority of overseas-based borrowers live in Australia and this new agreement will be a significant step forward in speeding up the repayment of the estimated $3.25 billion borrowed by those living offshore,” Mr Woodhouse says.

“Inland Revenue will continue to target overseas-based borrowers who are in default and will use a range of methods to recover the money owed to New Zealand tax payers, including legal action when appropriate.”

ENDS

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