A Kiwi living in Australia who took out a $6500 loan 21 years ago which has more than quadrupled is terrified to come back to New Zealand.
She is one of several worried Kiwis living overseas who fear being arrested as soon as they step foot in their homeland after another border arrest because of student loan debt this week.
The woman in Australia said she was 18 when she took out a $6500 loan for a social sciences course at a polytechnic.
She did not complete the course after getting pregnant, and after five years as a solo mother left for Australia to try and make a better life.
"I never blinked an eye or even thought about my loan," she said. That changed when she read about recent crack-downs on defaulters, and phoned the IRD.
She said she was told her loan after 21 years was now about $30,000.
"I went into complete shock, I was petrified and shocked that over the period of 21 years
my loan had increased 4 times the amount borrowed."
The IRD staffer told her a large repayment close to $20,000 would bring her up-to-date with her payments, she said, at which point she hung up.
"What is the point of me paying off 30-something thousand dollars when I'm never going to pay it off, I'm never going to smash out the interest, I'm never going to be rid of it.
"To tell my family I can't come home for a tangi is shameful. Will I be arrested at the airport? ... how will I pay my mortgage if I'm detained in New Zealand, what will happen to my children in Australia if I'm detained?
"If I was given the opportunity to pay the $6500 off I would in a heartbeat."
An Inland Revenue spokesman said there wasn't a "blanket approach" as to how those in default were dealt with.
"If borrowers are having difficulty meeting their obligations, they should contact Inland Revenue immediately so we can help them work out a repayment plan that fits their circumstances."
Interest was applied on loans when a borrower was overseas for longer than six months, and late payment interest is charged on overdue amounts in minimum repayment obligations aren't met.
"If a borrower ignores their obligations, that will inevitably mean the total amount owed will increase over time. If borrowers have intentionally refused to repay their loan, they have done a disservice to the vast majority of those who do the right thing and pay back their loans."
Tertiary Education, Skills and Employment Minister Steven Joyce said the message to those worried about their debt was to make contact with the IRD.
Those that did so and were committed to a repayment plan would not be at risk of arrest, which was a truly last resort measure aimed at those deliberately avoiding contact and repayment obligations.
"There is no requirement to pay big lump sums for everybody, it is all on an individual circumstances basis. And there are hardship provisions that are available.
"But at the same time, there are also people that can definitely afford to pay off their loans and have been deliberately ignoring them for a long time. I just think it is a matter of being in touch with [IRD], having the conversations, and contributing what people are able to and can afford."
Asked if Inland Revenue should have more flexibility to strike deals with borrowers - perhaps providing a discount for a big repayment - Mr Joyce said that was unfair to people who had paid back their loan.
But Inland Revenue had flexibility in terms of a repayment plan, he said.
NZUSA president Linsey Higgins said she is dismayed at the use of "draconian" techniques to recoup student loans.
"Pushing borrowers to repay using harsh techniques is only going to create an adversarial relationship. It breeds fear and forces people to never return. This is damaging to our reputation as a nation."
A woman was arrested at Auckland Airport as she tried to board a flight to Australia on Tuesday, the Herald understands. She appeared in Manukau District Court on Wednesday.
About 20 people who have defaulted on their student loans are being monitored for possible arrest if they return to New Zealand. The IRD has stressed an arrest warrant is "a very last resort".
In January, Cook Islands man Ngatokotoru Puna, 40, was arrested as he tried to leave New Zealand.
Mr Puna's arrest was the first time the hard-line arrest policy, passed in March 2014, had been used.
The IRD reported a surge in contact from overseas-based borrowers after Mr Puna's arrest, and those concerned about coming home have today contacted the Herald.
Another Kiwi now living in the Pacific said he contacted IRD and specifically asked if he was on any arrest list, or if his situation was bad enough to be placed on one in future.
"They would not answer any of those questions, and instead continued to use the threat of arrest as a reason to get on track. For this reason I fear arrest every time I come home.
"IRD are being draconian in their application of this. I applaud them for trying to assist people to sort out their debt, however, behind their nice facade and PR campaign lies a bureaucracy that is very hard to deal with and is causing a great deal of stress."
An Inland Revenue spokesman confirmed an arrest warrant was executed by police this week. Taxpayer secrecy prevented the release of more details.
"Our powers to arrest at the border are used as a very last resort, and would only follow strenuous efforts to contact the borrower to make repayment arrangements - these would typically involve making phone calls, sending correspondence via mail and email to the borrower, and attempting to contact them via any third parties such as nominated persons and/or any known employer."
Those in default and living in Australia will come under more scrutiny from next month, when a transtasman information-sharing agreement begins. It will cover contact details of student loan borrowers living in Australia.
That could see thousands more borrowers receive warning notices. Accurate contact information is crucial, as a district court judge can issue an arrest warrant only if satisfied a person is knowingly avoiding repayment obligations.
The majority of overseas-based student-loan borrowers live in Australia. Legislation allowing the information-sharing passed last month.
Student unions have criticised the border arrest policy as draconian and likely to make overseas Kiwis "student-loan refugees"- unable to return home for weddings, funerals or other important events.
There are about 112,000 overseas-based student-loan borrowers, and roughly 70 per are in default.
Mr Puna, who has lived in the Cook Islands for 13 years and whose $40,000 loan had ballooned to about $130,000, said the IRD sent reminder letters to the wrong address.
He borrowed $5000 from his parents to pay the IRD before it was satisfied he could leave the country.
Over the first two months of this year there was a 31 per cent increase in repayments by overseas-based borrowers, compared to the same period last year, with $7 million more received.
Emails to IRD were up 62 per cent, and phone calls increased by 55 per cent.
Inland Revenue believe that the publicity around the first arrest at the border contributed to the increased activity.