University debtors head offshore

New Zealanders living overseas owe on average nearly $20,000 in student loans, almost twice as much as those at home, according to Statistics New Zealand figures.

The figures examine the debts of 388,000 students who borrowed under the student loan scheme between 1997 and 2002.

They showed a clear link between the size of loans and the decision to go overseas, New Zealand University Students Association co-president Fleur Fitzsimons said on Monday.

"The Government can't continue to deny that student loans are forcing our best and brightest overseas," she said.

Students who took out a loan between 1997 and 2001 and have since left the country had an average debt of $19,550 compared with $10,670 for New Zealand residents.

Overseas residents made up about 7 per cent of student loan holders in 2002.

The average student loan was $12,280 by March 2003 and half owed less than $8220. Only students studying natural and physical sciences, architecture and building, or health had median loans of more than $10,000.

Ms Fitzsimons said the figures showed how difficult it was for health workers to repay their loans.

"They are the most likely to have loan balances of over $10,000."

The report said about 12 per cent of students had now paid back their loan. The remaining 88 per cent were either still studying or in the early years of their careers and making little progress with loan repayments.

Tertiary Education Minister Steven Maharey said the Government was concerned about the high debt levels of people overseas and said former students should make arrangements for loan repayment before going overseas to avoid penalties.

The total student loan debt is estimated at $7 billion.

- NZPA