Australian students who have made the move to New Zealand and have incurred debts from student loans are being warned that they could face a possible arrest on return to their homeland.
Tougher Laws Passed
As a result of new laws passed in 2014, New Zealand’s Tax Office now has powers in place that enable them to locate and arrest any NZ students that have defaulted on their educational loan agreements. This is of course a last resort but it is believed that the new law will create more defaults due to the fact that new obligations to pay these loans off by non-NZ based students begin to take effect.
It is believed that as much as 90 percent of overdue/defaulted student loan agreements are caused by overseas based NZ nationals. This amount adds up to $NZ683 million.
The changes in the loan agreement terms mans that overseas borrowers have interest added to the loan amount as opposed to their actual income total. The NZ Inland Revenue are asking all Australian based student loan holders to make note of the new rules in order to facilitate the increase in repayment terms sooner rather than later.
Students Advised to Contact Inland Revenue
As long as the NZ students living in Australia make contact with the Inland Revenue, they will be able to sort out a mutually agreeable repayment plan. Currently they are advised to make a bi-annual repayment on September 30 and March 31.
These can be spread over the whole year and broken down into monthly payments, as long as the agreed minimum amount is reached.
They are also allowed to make the repayments into an Australian bank using the national currency; this will avoid the need for currency conversion costs as that expense will be met by the New Zealand Inland Revenue.
The Inland Revenue PayWay service has been extended into Australia to allow this facility to be accessible by the overseas NZ students accordingly.