Overdue student loan repayments add up to $1.2 billion, a new report shows.
The figure is up 12 percent since last year and three-quarters of the borrowers with overdue payments are based overseas.
Education Minister Chris Hipkins says the report, presented to Parliament on Wednesday, shows students are leaving study with higher debt and taking longer to pay it off.
The average student borrows about $9,053 per year and has a median debt of $17,780 by the time they leave study.
It takes the average student seven years to pay off their loan, while for overseas borrowers, the figure doubles to 14 years.
As of June 2017, there were 110,000 overseas borrowers and 622,000 based in New Zealand.
"Fewer students are going on to study at a post-school level," Mr Hipkins says. "Students are telling us that they have been put off by higher costs and the burden of debt."
The Minister said the Government will ensure students studying from 2018 won't need to borrow as much and will leave study with less debt that they can repay faster.
The Government is implementing the first stage of its fees-free policy in 2018, and is boosting student allowance and living cost entitlements by $50.