A man uses his mobile phone outside an Australia and New Zealand bank branch in central Sydney August 16, 2013.
A man uses his mobile phone outside an Australia and New Zealand bank branch in central Sydney August 16, 2013. REUTERS/Daniel Munoz

The New Zealand government's student loan collection overseas has netted $150 million in additional payments. According to Tertiary Education and Employment minister Steven Joyce and Revenue inister Todd McClay, the pace of collection has picked up drastically. The initiative was launched at the end of 2010 and targeted defaulters in places such as Australia, the United Kingdom, EU, North America and Asia. According to the ministers, the initiative took three years to collect first $100 million, and in just six months it collected the next $50 million. The initiative now has a return of $16 for every $1 invested.

Friendly Initiative

The Inland Revenue has set up a toll-free number for helping borrowers in the United Kingdom and Australia. The incoming calls at an average of 224 per day is showing an increase of 40 percent. Joyce said people are realising that just because they have left New Zealand they should not be leaving the debt behind. He said it is a moral obligation for them to pay back the New Zealand taxpayer who helped these students with their education. "So we want that debt repaid and have a sustainable scheme that can support many generations of students,"Joyce added, reported Scoop News.

Easy Repayment

McClay explained that punitive actions such as detaining defaulters at the border will be a last resort. But the minister expressed happiness that borrowers are willingly responding to the measures to make the loans easier to pay back. The overseas borrowers can choose from four online money transfer companies who are offering free services. They can also use credit or debit card. The Inland Revenue will waive the convenience fee. As a parallel measure, the IR is keeping a tab on all defaulters. It contacts the borrowers directly and also use advertising and hired services of private debt collection companies. In the worst instances, legal action will be taken against those who refuse to pay.

Inland Revenue has alraedy obtained five successful court verdicts in Australia ever since the initiative began. Despite the scheme's good progress, there is still a total of $686 million in overdue debt owed by many overseas debtors. Joyce blamed Labour governments for allowing the debt to pile up and for ignoring the problem. Now Inland Revenue is alert and proactively tracking defaulters, and it is for them to avoid legal action, reported 3 News.