New Zealand authorities are ramping up efforts to recover billions of dollars in unpaid student debt from Kiwi expatriates, as an economic downturn fuels a spike in borrowing.
Tax officials are obtaining information from the New Zealand Customs Service to track down overseas-based debtors who owe some NZ$2.5 billion (£1.1 billion) – more than three times as much as a decade ago.
Kiwis who move overseas are obliged to remit up to NZ$5,000 a year, on a tiered scale based on how much they owe, until they have squared their student debts. But barely one-quarter meet this obligation, according to a Ministry of Education report.
Expatriates account for 75 per cent of overdue borrowers and 93 per cent of the arrears, which include NZ$1.1 billion in penalties and accrued interest. Most overseas-based debtors, unlike their compatriots at home, are charged interest on their loans – currently levied at 5.6 per cent a year, and 9.6 per cent for overdue repayments.
New Zealand’s Inland Revenue department is monitoring inbound and outbound flights to confront debtors, and taking legal action against “borrowers who refuse to engage”. In May, an Australian-based doctor who owed about NZ$180,000 was arrested at Wellington airport, according to Radio New Zealand.
