NZers overseas have highest student loan debts

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 released today.

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

The statistics showed a clear link between the size of student loans and the decision to go overseas, New Zealand University Students Association co-president Fleur Fitzsimmons said today.

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

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.

Men owed more, averaging $8680 compared to $7860 for women.

Only students studying natural and physical sciences, architecture and building, or health had median loan balances more than $10,000.

Natural and physical science students owed the most at an average of $11,170.

Ms Fitzsimmons 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 and of those overseas they have the highest debt."

The Tertiary Education Commission was considering whether to raise doctors' fees by an additional $1000 annually.

"It sends a clear message to the commission that they must refuse to raise fees for medical students at Otago and Auckland universities."

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, Statistics NZ said a report.

"It's clear the student loan scheme is one that New Zealand students and graduates can't afford," Ms Fitzsimmons said.

Tertiary Education Minister Steven Maharey said today the Government was concerned about the high debt levels of people living overseas.

"Inland Revenue (IRD) has made every endeavour to ensure people with student loans understand that they need to make arrangements before going overseas to avoid penalties," he told NZPA.

"It does concern us, that's why IRD does everything possible to help those with student loans to understand their situation when they leave the country."

The IRD has estimated the total student loan debt is $7 billion.

Graduates must repay at least 10 cents in every dollar above $16,172 if they are working in New Zealand and are required to pay by instalments if overseas.

Interest is written off during study but borrowers must pay 7 per cent once they leave.

- NZPA