Student Loans

You can run from your student loan, but you can no longer hide in Australia

As a third student loan defaulter is arrested at the border comes the news that you can run from your obligations, but hiding in Australia is no longer an option.

Another student loan defaulter has been arrested as part of a government crackdown, with warnings that Kiwis overseas can expect a knock on their door if they don’t pay up.

News of the arrest – the third since the start of the year – comes with the launch of a new information-sharing agreement between New Zealand and Australia to identify student loan borrowers living across the Tasman.

Inland Revenue has been targeting student loan defaulters in an attempt to recoup some of the more than $1 billion which is owed.

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New research shows claims about student debt over blown

Testing policy options with actual evidence is a novel idea and is generally absent from the often inane, evidence-free suggestions we have to put up with in New Zealand.

All sorts of claims have been made by politicians regarding student in New Zealand, but the funny thing is none of their claims are new. They are just recycled attack points from overseas. The most recent claims are of course from Labour who have variously claimed that student debt affects home ownership and their new policy of free degrees is to help stop the “problems” of student debt.

I expect we would see echoes in New Zealand of the ?Evidence Speaks? findings from the US, which contradicts all of Labour’s claims.

1. Student loans aren?t pushing down homeownership rates
For several years, leading economic thinkers such as Larry Summers and Joseph Stiglitz have proposed that high levels of student debt are creating a drag on the housing market.

New Evidence Speaks research from Nonresident Senior Fellow Susan Dynarski challenges that assumption, finding that student debt isn?t the reason homeownership rates are dropping. Rather, the main division between the home ownership ?haves? and ?have-nots? is their education level?not their debt.

Dynarski finds that while those without a college degree are more likely to own a home at an earlier age than those who went to college and accrued debt, the college-educated catch up fast. By 27, those with a college degree overtake those without degrees in homeownership. By 35, the gap in homeownership between those with and without a college education is about 14 percent.

?The college-educated?even those with student debt?are winners in our economy,? Dynarski concludes.

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Winston: volunteer for 5 years of slavery in the regions and have your student loan wiped

Winston Peters is proposing something novel, though I’m not sure how well it would be received.

Winston Peters is proposing a loan write-off for students who work for five years in regions where there’s a labour shortage.

And immigrants would get points if they’re prepared to live in the provinces.

The NZ First leader set out these policies in a speech at a public meeting in Gore today.

“We would write off student loans in areas where there are critical regional shortages,” he said.

“Graduates spending five years in such a programme would have their student loan written off, and after five years many of them will want to stay in that region.”

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You can run but you can’t hide

Student loan defaulters skulking in Australia are in for a rude awakening.

New laws making it easier for the?IRD to track Kiwi student loan defaulters living?in Australia could help claw back as much as $100 million extra a year.

About 70 per cent of overseas-based?borrowers are in default, and about 60 per cent are thought to be in Australia.

Thousands of them now face?Australian debt collectors,?courts or arrest at the border after?a data-sharing swap with the Australian Tax Office gives the?IRD access to the contact details of any defaulters?who have paid tax in Australia.

Until the latest measures were passed into law earlier this week, it was considered too hard for the IRD to track down defaulters living overseas. ? Read more »

This is why you prosecute student loan defaulters trying to skip the country

This is the positive result of prosecuting one student loan defaulter.

Anthony Davidson studied for one year at the Central Institute of Technology in Upper Hutt during 1994, before moving to Australia the following year.

He borrowed “about $7000”, and had no intention pay it back as interest ballooned the owed amount to $17,000 this year.

“I always knew that the loan was there but I didn’t really do anything about it until I saw on the news that the other bloke got arrested,” the father of three told ONE News.

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A Reader from Runanga writes about Little’s Education policy

So Labour want to make education ‘free’.? Where do I start?

First of all, nothing funded by taxpayers is free – it just costs everyone.

Labour supporters say it can be paid for by higher tax takes from incomes rising due to people being better qualified.? Sounds nice, but with no bonding there’s nothing to stop all these qualified people from going overseas and paying tax in other countries.

With any Labour policy you obviously have to look at which unions benefit – in this case NZUSA and the TEU.? And what have they said?? Well the TEU have been pushing for higher pay for their members – would a Labour govt give in and hike their pay?? Has this been accounted for in the costings?? And today they came out basically saying that current funding isn’t enough.? Labour have pledged to pay the ‘full costs’ – would they pay what universities and training providers demand, or risk angering their union mates by keeping funding tight? ? Read more »

Labour will go after the student vote with major bribes

Labour is set to announce plans to cut the cost of tertiary education, with the policy likely to be the centrepiece of leader Andrew Little’s state of the nation speech in Auckland on Sunday.

Education spokesman Chris Hipkins, who picked up the role in Little’s November reshuffle, signalled at the time Labour wanted to cut the cost of post-school education and that lowering fees was a priority.

This week he would not confirm any details of a possible policy announcement on Sunday. Hipkins said there were “a range of options” available to Labour.

But he pointed to Labour’s track record in lowering financial barriers, such as capping tuition fees.

In 2005 its promise to make student loans interest free for all those remaining in New Zealand was seen as a key to Labour’s re-election.

Hipkins said cost was one of the main barriers to students taking up further study.

Education providers in the sector had seen cost rises of about 9 per cent, with average hourly wages rising 8 per cent, since 2009. Over the same period tertiary tuition funding had risen just 3.5 per cent – from $2.4 billion to just under $2.5 billion. Read more »

Mike Yardley on student loan bludgers

Mike Yardley lets rip on student loan bludgers.

The melange of migration-related headline grabbers in the past week brings into sharp focus what New Zealand is doing right and also badly wrong.

Inland Revenue (IRD) and our border control authorities are finally flashing their fangs against unrepentant student loan defaulters, who couldn’t give a flying fig about paying their dues to the taxpayer.

The warning bell clanged loudly before Christmas that Kiwis abroad heading home for the holidays may be arrested at the border if they’ve defaulted on their student loan. IRD starkly warned that those in “serious default” may be grounded until they have a repayment scheme in place.

Ngatokotoru Puna’s airport arrest over his $130,000 debt should serve as a potent deterrent to others, who blithely thumb their nose at their repayment obligations, don’t give a damn about their billowing debt, make no effort to contact IRD, and think they can swan in and out of New Zealand with impunity.

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$40,000 for a worthless piece of paper?

student-debt

“Tell?us about your student loan troubles,” says the Stuff news website under an article about a student who has been arrested at the airport for failing to communicate with IRD. The student involved handled his problem by putting his head in the sand and thinking that if he left the country and ignored the IRD attempts to communicate with him, his obligations would magically go away.

I was with my son when he signed up for his student loan. The staff member spent a lot of time very clearly explaining my son’s obligations. Besides a student loan ?for course costs there was an additional lump sum of cash that my son could access . It was explained to him that this money was not free and that eventually he would have to pay it back just like the student loan. He was informed what the total amount would be if that was added to his student loan. My son chose to keep his obligations to a minimum and turned down the offer. ?He was told that other students use the cash to buy a car as it was interest-free. ?At the end of this course my son will have a smaller debt than those students because he is prepared to delay gratification and wait for a car.

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Would you arrest people that took $3.1B from you and wouldn?t give it back?

If anyone should be arrested for student loan debts it should be Helen Clark.

Inland Revenue is currently monitoring and considering the arrest of 20 overseas student loan borrowers who continue to default on their repayments.

It estimates there are almost 110,000 borrowers overseas who collectively owe about $3.1 billion.

Inland Revenue (IRD) can issue a warrant for the arrest of those who persistently default on their loan repayments.

In the past year, 20 Australia-based borrowers were referred for legal enforcement. Three have now repaid what they owed.

The Minister of Tertiary Education, Skills and Employment, Steven Joyce, said since the campaign to encourage overseas student loan repayments began in 2010, more than $200 million has been repaid.

He said for many it was the threat of arrest that forced their hand. ?? Read more »

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