Changes to student loans for expats

Law changes from 1 April this year will impact New Zealanders with student loans who live abroad.

If a borrower’s loan balance is over NZ$45,000, the amount they need to repay has increased.

Overseas borrowers will now have a fixed minimum repayment obligation regardless of their loan balance. Previously the minimum repayment decreased along with the loan balance.

Of perhaps more concern is the ability for the IRD to stop overseas based borrowers from leaving New Zealand the next time they visit if they have fallen behind with their repayments or ignored their responsibilities.

The IRD have said that they will attempt to contact borrowers in this position whilst they are in the country. However, they have also said that they will apply for an arrest warrant for any borrowers who fail or refuse to make a reasonable effort to pay or make an arrangement to pay.

If you know of anyone who may be impacted by these changes, feel free to forward our details to them. We are only too pleased to discuss how it may impact their personal situation. More information is available on the IRD website.