IRD is improving collection of student loan.
- They started by proposing an information exchange programme with Australia to improve collection amongst student loan borrowers living in Australia.
- On Monday 18th of January 2016, first arrest on a student loan borrower was made at the airport. The reason for the arrest was because the loan borrower was well behind on repayments and ignored requests from the IRD relating to the loan. Therefore, an arrest warrant was issued to stop him from leaving New Zealand until the arrears are resolved. This was the first ever arrest made for failing to repay student loan and stopped the taxpayer at border from leaving New Zealand. This shows that the IRD applies a tighter control on student loan.
In recent year, the borrowing amount has gone up to $1.6 billion a year in average. However, there is a big gap between the borrowing and repayment amount as it stands at $500 million. (source- Student Loan Scheme Annual Report 2015 issued by Ministry of Education) Many borrowers after finishing their student have gone overseas to avoid paying back the loan. Thus, the IRD is strengthening their collections of student loan borrowers targeting borrowers fleeing overseas.
Reference: http://www.educationcounts.govt.nz/__data/assets/pdf_file/0003/170229/Student-Loan-Scheme-Annual-Report-2015.pdf
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