Govt may use student loan debt collectors abroad

Peter Dunne said the Government was looking at a range of options. Photo / Sarah Ivey

The Government is investigating using debt collectors to recover more from student loan borrowers living overseas.

Revenue Minister Peter Dunne said the option was being considered as the Government looks to crack down on people failing to make repayments. Overdue repayments from overseas-based debtors grew 111.1 per cent last year. The group represented less than 15 per cent of borrowers but 20 per cent of the $11 billion owed.

"We are looking at a range of options about how we pursue overseas student debt and that work is still being done," Mr Dunne said.

Most borrowers who lived in New Zealand were meeting obligations to pay money back.

"The problem is with people who go overseas."

Some students were registered under the three-year holiday period, while others were avoiding coming home because they had not made repayments and now faced very high loans because of interest and penalties; "to some extent they are like refugees", Mr Dunne said.

"But there are others that have worked out because we can't track them they don't put their hand up.

"It's a fairness issue, why should New Zealand-based debtors repay on time and do very well - what's the point if those living offshore can basically get away with it?"

Mr Dunne said the Government had approached other countries including Australia and Britain about reciprocal recovery arrangements.

"To our great surprise the response we received from both of those countries, to put it very colloquially was 'we don't bother chasing our offshore debtors, why should we chase yours?'. They basically say 'shrug your shoulders, there's not much you can do, leave it be'.

"We have a slightly more rigorous attitude but the question is just how we track them down."

While work about recovery was ongoing Mr Dunne would today introduce a bill to implement previously announced changes to make it easier for debtors to pay money back.

That included online facilities and centres to help overseas borrowers.

- NZPA