Inland Revenue officials will today start legal action against New Zealanders in Australia who are "deliberately flouting" repaying their student loans.
The Government began contacting expatriate graduates last October and $818,392 in loans had been paid by 243 borrowers by the end of April.
A further $1.09 million was paid by 400 borrowers after an indirect campaign via Facebook and Google.
More than $15 million is owed by 3500 expatriates in Australia and 1000 of those have been contacted.
Tertiary Education Minister Steven Joyce said authorities would start sending letters to Australian-based defaulters warning that legal action is being taken as a result of their ongoing refusal to pay up.
People who owed significant sums of money would also be targeted.
"People who are based overseas are taking on average 14 years to pay back their debts, and that affects the sustainability of the whole student loan system.
"It's just not fair on taxpayers and it's also not fair on borrowers who remain in New Zealand and pay their debts."
Joyce said he hoped the defaulters would make payments before Inland Revenue had to proceed with legal action.
"Ideally people will realise they have this legal commitment and it isn't going away."
Three direct campaigns have been running in Australia and the scheme has now been extended to the United Kingdom.
When the campaign first began in October $325 million was owed in overdue student loans, with more than half that by people living overseas.
- © Fairfax NZ News