Australia-based Kiwis target of student loan crackdown

Tertiary Education Minister Steven Joyce
Tertiary Education Minister Steven Joyce

Kiwis living across the ditch who are defaulting on student loan repayments are being warned to pay up or expect a knock on the door by debt collectors.

More than 10,000 loan holders have been identified as living and earning in Australia, and each one will now be rigorously examined by Inland Revenue.

Tertiary Education Minister Steven Joyce says it's a huge development.

"It's probably the biggest single group of overseas-based borrowers that are in default that have been identified in one hit by the IRD, working with the Australian Tax Office."

He's also revealed another defaulting Kiwi was arrested trying to leave the country.

Mr Joyce says it should set off alarm bells for defaulters.

"If you're literally avoiding the IRD deliberately, not taking it, making any arrangements, refusing any contact, not taking up any arrangements to pay, then that's the last resort. You may find yourself struggling to cross the border."

Inland Revenue will now go through the records of every one of those identified in Australia to check their compliance.

"They've had good progress today - about 35 percent more people who are overseas-based coming into the system and paying some money," says Mr Joyce. "This will bring it forward a lot more and it's a big step forward in terms of recovering that money."

He says those who continue to default could be arrested at the border on return.