Finance: IRD closes in on expats

By Jeremy Tauri

Inland Revenue is stepping up its efforts to recoup student loans from borrowers living overseas.

People who leave New Zealand are given a year's holiday before they must make payments on these loans and, unlike borrowers in New Zealand, interest is added to their bills.

IRD is now seeking third party collection agencies to help get the $2.5 billion outstanding from borrowers overseas, particularly in Australia and Britain.

I remember completing my student loan forms. It was my first loan application and what did I know about money then apart from how to spend it?

If you couldn't pay for all your tertiary education or were short on living costs, you filled out a form and it would be taken care of. It was the thing to do.

Paying back a student loan was also simple. When I got a job I would tick the correct tax code and the deductions just happened when I began to earn more than the repayment threshold. However, after years of seeing the deductions on my pay slip (and realising the value of extra money), I did look forward to that last payment.

But what if had moved overseas?

I could have applied for a repayment holiday (still charged interest subject to conditions) but I would have to manage the payments; I would have to remember there were payments to make. They weren't deducted automatically by the Government in another country.

Would I have remembered to disclose my student loan on my credit applications overseas, stopping me from obtaining "real credit" for that 50-inch TV? Would I expect a collection agency to hand me a piece of paper and tell me (with an accent) to pay my New Zealand student loan? Probably not, but for some of the 91,000 expat borrowers, that time looks to be coming.

If I had moved overseas it could have been because the government I borrowed money from couldn't find me a job in the country I grew up in? That seems flawed to me. As flawed as the fact I could borrow tens of thousands, move overseas and forget to repay. Perhaps it's time the Government looked at which courses it offers student loans on. Some have disproportionately high fees considering the wages their graduates earn - or the likelihood of them even finding a job. Study for study's sake is fine, but should it be government-funded?

Maybe we should just make tertiary education free, as it was when Tertiary Minister Steven Joyce did his zoology degree.

- Hamilton News

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