Student loan bill passes

Last updated 19:23 06/03/2014

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Tough new sanctions under which the worst student loan defaulters will be arrested at the border passed through final stages at Parliament this afternoon.

The Student Loan Scheme Amendment Bill (No 3) is aimed at borrowers who persistently refuse to make repayments.

From April 1, Inland Revenue will be able to seek an arrest warrant to deal with serious cases. And those with loan balances of over $45,000 will have their repayment rates increased.

The Government wants to claw back millions of dollars in unpaid debt, and says overseas-based borrowers are responsible for 80 per cent of all overdue loan repayments.

Tertiary Education Minister Steven Joyce said: "It is important that student loan borrowers meet their obligations to the people who have supported their tertiary study, wherever they are in the world, so we can provide the same support for the next generation of students."

The bill was introduced in August last year.

The New Zealand University Students' Association (NZUSA) has argued the sanctions would be ineffective as less than half of defaulters carry Kiwi passports.

Opposition MPs also argued the changes would lead to student numbers falling and debts growing.

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