Changes to the student loan system were announced in this years’ budget. The Government stated that new initiatives were necessary to raise the level of repayments made by overseas-based borrowers and to target those who default by introducing penalties.
As a result of the announcement, the Student Loan Scheme Amendment Bill (No 3) has been written and is now before the Select Committee. The bill, if passed into legislation, will change the current scheme in three main ways:
- Inland Revenue will have the power to request arrest warrants for borrowers who persistently default on their student loan obligations.
- Overseas-based borrowers’ repayment obligations will be fixed. Currently, repayment obligations decrease as a borrower’s loan balance decreases.
- The Department of Internal Affairs will be allowed to provide Inland Revenue with contact details of borrowers in default, received at the time a borrower renews his or her passport.
If you are interested in making a submission you can do so by completing an online submission form on the New Zealand Parliament website before 11 October 2013.