Woman stopped at border over student loan debt

Woman stopped at border over student loan debt

Woman stopped at border over student loan debt

A woman has been arrested trying to leave the country over student loan debt.

According to information provided to Newshub by the IRD, the arrest was executed earlier this week by police.

Due to taxpayer secrecy provisions, no more information could be provided  although it is believed the woman appeared before the Manukau District Court on Wednesday.

According to the IRD, arrests at the border are used as a "very last resort", and only follow strenuous efforts to contact a borrower.

However, NZUSA president Linsey Higgins says using harsh techniques is "only going to create an adversarial relationship."

"It breeds fear and forces people to never return. This is damaging to our reputation as a nation."

Currently there are around 20 overseas-based loan defaulters currently being monitored.

They could face arrest should they try to enter New Zealand again.

All up, around 112,390 student borrowers now live overseas -- with an estimated $3.25 billion of debt -- and 70 percent are behind in their loan repayments.

Since 2010 the Government has been increasing its efforts to make them repay.

Last month, an information-sharing agreement with the Australian tax department means that IRD can track more loan defaulters who are living there.

It could see thousands of borrowers receiving warning notices.

NZUSA calls for better repayment conditions for overseas-based borrowers, and better promotion of support for overseas-based borrowers, such as free money conversion facilities.

"Instead of using legislation to make them criminals, the rules should be used to support borrowers to make repayments.

"We would be delighted to work with the Ministers to see this happen." says Ms Higgins.

Earlier in January, The nephew of the Cook Islands Prime Minister became the first man to be arrested for ignoring requests to repay his student loan.

Ngatokotoru Puna, 40, from the Cook Islands studied at Auckland University 20 years ago.

He was detained after coming back to New Zealand for a visit when he tried to leave the country.

The arrest was the first time legislation giving the Inland Revenue Department (IRD) such power had been used.

He had been living overseas since 2004 and his original loan was $40,000 which ballooned through interest and penalties to more than $120,000.

He had to borrow $5000 from his parents get his passport back and so the case against him would be dropped.

"We tried to engage with the customer on numerous occasions by phone, email and letter and he's failed to engage with us and it got to the point where we've decided to use our powers in the most judicious way and arrest him as he tried to leave the country on Monday, " an IRD collections manager, Stuart Duff, told Newshub.

Mr Puna said to Judge Charles Blackie at the time that it was "unreasonable" to expect him to pay so much back.

He said he worked for a low salary as a teacher in the Cook Islands and has five children.

He was here to speak at a conference, invited by the Association of Maths Teachers.

Mr Puna said he never had any communication from IRD that he owed so much money, and prior to 2012 earned under the $30,000 threshold where loans don't have to be repaid.

Newshub.