-
Related
A new law that could demand immediate repayment of a student loan may be in place before the election.
The Student Loan Scheme Bill, which Revenue Minister Peter Dunne says is designed to target the worst loan defaulters, would grant the Inland Revenue commissioner the power to recall entire loan balances, as well as give the courts power to prosecute anyone who did not comply.
That would largely apply to those overseas, who were the worst defaulters, he said.
There had so far been no prosecutions for overdue payments, Dunne said. "It's a system developed on trust.
"We're trying to close the gate very much after the horses have bolted and, in some cases, we don't know where the horses have gone."
Inland Revenue did not know how many student loan debtors there were overseas because no records were kept before 2007, he said.
"We don't honestly know how many people are there. It's a very substantial number."
Dunne said he had approached Britain and Australia about establishing a reciprocal scheme to track down defaulters in their countries, but they had so far not been interested - something he hoped would change after they saw the results of New Zealand's recent efforts.
A campaign running since October to remind overseas loan defaulters of their duties had returned $4.50 for every dollar spent, and the Government had recouped $2 million, he said.
Labour tertiary education spokesman David Shearer said although he supported moves to get tough on serious loan defaulters, particularly those overseas, he wanted restrictions on the amount of power that the commissioner would have.
"I think it needs some guidelines in the legislation about how it can be used so people have confidence that it's going to be used fairly on those people who are recidivist loan repayment missers."
Loans should not be recalled if it would adversely affect others, such as children, he said.
New Zealand Union of Students Associations co-president David Do echoed the need for legislative restrictions on the commissioner's power.
"It would be helpful for the bill to include specific provisions that give protections to borrowers on the basis of financial hardship or other extenuating circumstances."
The campaign targeting defaulters had mainly been in Australia, but it was being extended to Britain, Dunne said. Although the response in Australia had been mostly positive, responses from Britain had been more hostile.
Latest NZ News Video
-
ONE News Minute 9am update: May 26 (1:00)
-
Kids cough up $14m for Government (1:50)
-
Education ministry 'barbaric' (1:55)
