Kerre Woodham: Prodigal student loan defaulters should not be pampered on return

Photo / Martin Sykes

I've never really understood the parable of the Prodigal Son.

One lad works tirelessly for his father, caring for him in his dotage, putting up with all the tensions that come from working on the family farm; the other brother takes his inheritance and faffs off to the big city, blowing the lot on women and rivers of wine.

Eventually skint, alone and with nowhere to go, the bad boy returns to the farm where he's greeted with a fatted pig and a homecoming party to rival that of a war hero's.

The good son is understandably miffed but when he expresses his disappointment, he gets a lecture from his dad. The clear moral of the story is that virtue goes unrewarded.

The parable appears to apply to our ex-pat students, who have refused to pay back their student loans.

Overdue repayments from overseas students rose 111 per cent last year and despite being just more than 14 per cent of student borrowers, they make up 20 per cent of the total amount owing.

Government's been trying to get the money out of this particular group for years - in 2007, Michael Cullen and Peter Dunne announced a series of measures, including a three-year holiday on repayments and an amnesty for overseas students.

By making it easier for them to repay their student loans, we removed a disincentive for them to return to New Zealand when they were ready, said Dr Cullen, which was benevolent but ultimately futile.

A couple of years earlier, Trevor Mallard and Helen Clark announced an amnesty on penalties on overdue payments for any returning students who entered into repayment schedules - and that didn't work either.

Now Peter Dunne is back, quoting from the same script, promising to reduce penalties for overseas student loan borrowers.

But by using carrots rather than sticks, the incentive to stay in New Zealand and pay back the money owed to the taxpayer isn't terribly strong either.

Loan defaulters should be stopped at the border and made to pay back their loan or enter into a repayment schedule before they can leave.

Taking money that's not yours and refusing to repay it is theft in anyone's book.