Arrest over student loan debt

The Herald ‘understands’ that a woman has been arrested at Auckland airport trying to fly to Australia over a student loan debt.

Woman arrested at airport over student loan debt

The woman was arrested at Auckland Airport as she tried to board a flight to Australia on Tuesday, the Herald understands.

She appeared in Manukau District Court on Wednesday.

An Inland Revenue spokesman confirmed an arrest warrant was executed by police this week.

Taxpayer secrecy prevented the release of more details.

Some say this is draconian butIRD says they only use arrest as a last resort.

“Our powers to arrest at the border are used as a very last resort, and would only follow strenuous efforts to contact the borrower to make repayment arrangements – these would typically involve making phone calls, sending correspondence via mail and email to the borrower, and attempting to contact them via any third parties such as nominated persons and/or any known employer.”

It’s tough, but as much as anyone wants to argue about paying for tertiary education and the student loans system all those who take on a student loan should be aware of their responsibilities of keeping in touch with IRD and in in repaying the loan as and when required.

It is the harshest in a range of measures to recoup student debt from overseas Kiwis. Last year those based overseas made up 15 per cent of all borrowers, but 74 per cent of borrowers with overdue payments, and had 90 per cent of the amount overdue.

Those in default and living in Australia will come under more scrutiny from next month, when a transtasman information-sharing agreement begins. It will cover contact details of student loan borrowers living in Australia.

That could see thousands more borrowers receive warning notices. Accurate contact information is crucial, as a district court judge can issue an arrest warrant only if satisfied a person is knowingly avoiding repayment obligations.

The majority of overseas-based student-loan borrowers live in Australia. Legislation allowing the information-sharing passed last month.

There are about 112,000 overseas-based student-loan borrowers, and roughly 70 per are in default.

Tougher measures seem to be affective.

In January, Cook Islands man Ngatokotoru Puna, 40, was arrested as he tried to leave New Zealand.

Over the first two months of this year there was a 31 per cent increase in repayments by overseas-based borrowers, compared to the same period last year, with $7 million more received.

Emails to IRD were up 62 per cent, and phone calls increased by 55 per cent.

Inland Revenue believe that the publicity around the first arrest at the border contributed to the increased activity.

Some will find this additional information sharing and chasing up of loans tough but being in touch with IRD is the best way to deal with it.

Authorities say those in default should make contact with Inland Revenue, to arrange a repayment agreement or discuss hardship plans if in financial difficulty. Applying for an arrest warrant is a “last resort”, the IRD says.

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11 Comments

  1. Nelly Smickers

     /  3rd June 2016

    This could well become known as the ‘Examina Papers’ XD

    Reply
  2. Alan Wilkinson

     /  3rd June 2016

    People should be made responsible for their loans, but equally IRD should not be allowed to price gouge on interest rates and penalties. There is no justification for legalising loan-shark behaviour by a government agency.

    Reply
    • Gezza

       /  3rd June 2016

      What’s your feeling about this business we’re hearing of W&I making people pay back money they’ve given them as loans to pay for their urgent accommodation motel rentals, Alan. Seems like even more government agency loan-sharking behaviour to me.

      Reply
      • Alan Wilkinson

         /  3rd June 2016

        If it was originally a loan, then fair enough so long as the terms of the loan were a) specified before the recipient accepted, b) are fair quantitatively and qualitatively, c) the pay back is feasible given the debtor’s circumstances, and d) at the time the loan was given there was a reasonable expectation that the debt could be serviced and repaid given the debtor’s circumstances.

        If the department is making loans to people who have no reasonable expectation of the means to service and repay it then that is certainly loan-sharking behaviour that should be sanctioned and ended.

        Reply
        • Gezza

           /  3rd June 2016

          Anecdotally it seems only (a) might actually apply in many cases, and (e) if you don’t accept the terms you get nothing but someone’s shed or 2nd hand car or the local marae if you’re lucky enough to have one that opens it doors.

          Needs to be more research done into this by the MSM. Not sure the Sallies anecdotes are good enough and Paula’s not much help. MSM are still not good at digging into the background & getting more facts. Just rush into print with the sensationalist stuff and no background information, as we know Alan. But still, where there’s an information gap someone should be trying to fill it.

          Reply
          • Alan Wilkinson

             /  3rd June 2016

            Yes, there is a problem with both departments hiding behind personal privacy which makes it hard for journalists to nail them on any individual case and then they can claim they apply flexibility with impunity.

            Reply
  3. Brown

     /  3rd June 2016

    If you contract to repay a debt you should so students that flip the bird to the lender because they don’t like the ideas of meeting contractual obligations get little sympathy from me. Notwithstanding that, Alan is right about gouging – IRD are a modern day legalised mafia when it comes to imposing penalties.

    Reply
    • Gezza

       /  3rd June 2016

      They are too. Even power companies are more sympathetic these days and they’re not noted for their generosity.

      Reply
      • Gezza

         /  3rd June 2016

        I’ve got no complaints about their policies on legacies & endowment policies though.

        Reply
  4. patupaiarehe

     /  3rd June 2016

    Yup, get a loan & repay it. Fair enough. Or is it, when you take into account the ‘foolishness of youth’???
    I remember several years ago, a local dive training facility advertised a ‘dive trainer course’ (and they still are). One of the key selling points was that you could keep receiving your student allowance throughout the summer, and that you got to keep your ‘dive gear’ when you finished. My mates girlfriend enrolled in the course, and passed. She was under 5ft tall, and would have weighed under 50kg dripping wet. Needed help lifting her own empty air bottle on to the back of a ute! At least she didn’t spend the summer hungry…..
    Dive instructor my arse…

    Reply

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