Student loan borrowers based overseas are showing a greater commitment to paying off their debt, latest figures reveal.
Loan repayments by overseas borrowers are 40% higher than four years ago and as a result, this eagerness to do the right thing is slowing the rise of debt in default.
Inland Revenue customer segment leader Bernadette Newman says people are becoming more aware that their student loan obligations don’t end when they leave the country.
“No one wants that feeling of returning home only to find their student debt has spiralled out of control due to non-payment penalties and interest.
“Luckily, it’s never been easier to pay off your student loan while working overseas. There is a range of fee free options that makes it much more convenient to set up regular payments.
“The difficulty of sending money home was previously a big barrier for borrowers but since that’s been removed by using our free service fee options, we’ve seen a steady pick up in overseas repayments.”
One of the big due dates for student loan borrowers overseas is September 30.
Ms Newman says now is as good a time as any to remind family members overseas to log-in to their myIR accounts, check out their balance and then encourage them to make a dent in it.
“The smart thing to do is keep up with small and regular instalments to avoid having to pay late payment interest when you default.”
Fewer borrowers are defaulting on their loans and the rate of increase in the amount of default debt has slowed by half over the past four years.
“The amount of debt in default at $1.32 billion remains significant,” says Ms Newman, “but we’re hoping that the change in attitudes we’re seeing and the fact more ex-students are taking ownership of their loan balance, will slow any further growth in that figure.
“We’re seeing the majority of the borrowers do the right thing but there are still some people who have consistently avoided and ignored their loan obligations over a long period of time.
“Inland Revenue is tracking down more of these borrowers all the time so it always pays to make contact with us and get back on track before we contact you.” Find out just how easy it is to pay off your student loan at www.ird.govt.nz/myloan
Media contact: Baden Campbell 029 890 1674