Women's Council support stricter student loan rules

File photo / NZ Herald

Legislation to tighten up student loan rules has been backed by the National Council of Women.

Parliament's finance and expenditure committee is considering the Student Loan Scheme Amendment Bill, which aims to crack down on people who take out student loans then head overseas.

The bill would cut the repayment holiday period from three years to one year, and would make it a requirement for people applying for the repayment holiday to provide a New Zealand-based contact person.

In a submission to the committee this morning, National Council of Women chairwoman Wendy Zemanek said the council supported the bill.

"Overall, we believe the intent of the bill is fair," she said.

"All students who have benefited from the loan system should take responsibility for the repayment of their loans at a reasonable rate - they should not be allowed to 'play the system'."

In particular, Ms Zemanek approved of the requirement for a New Zealand contact to be appointed, saying it should be a prerequisite for accessing a loan.

"We believe that the contact person's rights and duties should be clearly defined, and to include a statement that the contact person is in no way responsible for the student's debt."

Ms Zemanek also raised some concern around a clause in the bill that would exclude losses from the calculation of income for student loan repayment.

"It seems unfair to exclude business losses when calculating the threshold for student loan repayment.

"When a person is struggling financially, the reality of the situation should be taken into account."

Revenue Minister Peter Dunne, who is responsible for the bill, has said the legislation aims to improve the rate of repayments, and decrease the overall amount of student debt.

The bill follows on from the Student Loan Scheme Act, which was passed by Parliament last October, and allows for defaulters' loans to be recalled in full from April 1.