Kiwi Expats with Student Loans Face Arrest
Yesterday the New Zealand government announced its budget for the coming year and one of the changes could leave Kiwi expats in a bit of a pickle…
So you study hard, party hard, gain your degree and score yourself a good job overseas (go you!) But as you settle in to your new and exciting life abroad that student debt you racked up getting there suddenly seems very far away… and very easy to forget about…
Well, as from June forgetting about your student loan could land you in a whole heap of trouble, and even a prison cell.
Next month new regulations will be implemented regarding student loans, including fixed payment obligations for borrowers based abroad and higher repayment thresholds.
As part of the revised rules expats who have failed to meet their student loan repayments can be arrested if they return to New Zealand for any reason or period of time, making going home for holidays a risky business!
And under the new sanctions and higher repayment thresholds a typical student loan of 20,000 New Zealand Dollars, which would currently be repaid over 35 years, will now have to be paid off within 15 years.
When asked whether he thought the changes would deter Kiwi expats from returning home Steven Joyce, New Zealand’s Minister for Tertiary Education, Skills and Employment, stated: ‘The message is do make your payments, that’s really important.’
Meanwhile Minister of Revenue Peter Dunne commented ‘Previously, around 14% of overseas-based borrowers did not meet the interest charged on their loans. We expect this to drop to 3.5 per cent. These changes will reduce repayment times for compliant overseas-based borrows’.
So if you’re a New Zealand expat with student debt and quite like the idea of being able to visit your family without pesky prison bars in the way, make sure you stay on top of your loan repayments!