Dom Post on loan defaulters

May 20th, 2013 at 3:00 pm by David Farrar

The Dom Post editorial:

There is a good argument for getting tougher with those living overseas who won’t repay their loans. Too many have decided to ignore their obligations.

Now the Government will require them not only to repay more quickly, but it also warns that persistent defaulters may be arrested at the airport.

This is punitive, unpleasant, and likely to be unpopular in a democracy that prefers the carrot to the stick. But nobody can complain.

The Government, after all, has taken a gradual approach. It offered amnesties and a chance to come to an arrangement with the IRD. It has also made it technically easier and cheaper to transfer the money home.

Many have responded reasonably: $64 million in outstanding loans has been repaid. However, some have ignored the offer and refused to repay. That can’t continue.

After all, if the people concerned had a low income and found it genuinely hard to repay, they were free to argue the point and try to make a deal with the tax-gatherer. Others could easily repay their loans but simply ignored the Government’s inquiries.

Those who have refused to do anything now face the threat of the bailiffs and, if they persist, of arrest. It’s hard to know what else the Government could do. Those who refuse to respond are breaking the social contract.

The social contract has responsibilities on both sides.

Students, after all, do not pay the full cost of their tertiary education. Even with the loans, they are being subsidised by the taxpayer. In return for that aid, however, they must make a contribution themselves.

This does not threaten the hallowed institution of OE, as Labour claims, or make it less likely that our high-fliers will return to the nest. Those who do their OE can’t just leave their fiscal obligations behind them. And highly -skilled people who stand to earn big salaries during their lifetimes can expect no sympathy if they default on their loans.

Repaying a loan should not be seen as optional.

The editorial however criticizes students aged over 40 having to get loans, instead of allowances.

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53 Responses to “Dom Post on loan defaulters”

  1. davidp (3,580 comments) says:

    Could you link this to passport renewal? No payments, no new passport.

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  2. Judith (8,534 comments) says:

    And highly -skilled people who stand to earn big salaries during their lifetimes can expect no sympathy if they default on their loans.

    The problem is that due to the commodification of knowledge and the practice of making our universities sites of consumption – the professor replaced by the administrator/provost – the quality of knowledge exchanged has decreased – many of those who have taken huge student loans to complete degrees in some of the many new courses (one that always gets me is a degree in aromatherapy) – are not skilled people earning big salaries (unless Macdonalds has increased its wages).

    Some of the courses offered will never return a wage that is sufficient to live on, let alone repay a student loan as well.

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  3. iMP (2,364 comments) says:

    LOAN SHERKS! Lock-em up at the border. http://conzervative.wordpress.com/2013/05/20/arrest-em-at-the-border/

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  4. Warren Murray (307 comments) says:

    Absolutely agree that the social contract comes with obligations by the borrower to repay. BUT it’s a crap system that is designed to arrest people when they arrive instead of extracting money or other commitment to repay the debt before they leave. Really dumb!

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  5. In Vino Veritas (138 comments) says:

    And therein lies the stupidity of the scheme in the first place. With the Government becoming a lender, the borrowers seem to think that it’s some sort of benefit. Lenders should be banks. See how much leeway they give if the loans aren’t being repaid!
    There was an article in the Herald a few days ago bemoaning the Governments stance and using a lad, who is working overseas as an example. He had a degree in computer science and had racked up a lazy $35K getting the degree. He had made some repayments then stopped, then started, then stopped. The debt is now apparently $100K. He chose to blame the Government and the IRD for making it difficult to pay back, for not having an “intuitive” website etc. No one from the Herald bothered to tell anyone that a Computer Science degree from Canterbury costs about $5K per year, so this knucklehead spent 6 or 7 years getting his degree, borrowing money all the time!

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  6. RRM (9,826 comments) says:

    I saw a horrifying article in AA Directions years ago, when they used to do a “Me and my car” feature each month.

    This one month “Me and my car” was about some 28yo Ms Masters Degree 2005 type chick, with one of those boxy knee-length denim skirts that were cool then, and long leather boots and a big chunky necklace. And her horrible little Nissan Figaro thing that she’d bought on tick for something like $18k.

    The car was her “reward to herself” for finally graduating with her MA in feminist studies & classics (or whatever) and a $100k student loan. Eek.

    She’d been job hunting for a few months and it wasn’t going too well, but she remained optimistic and didn’t see anything wrong with this whole financial picture. Eek again…

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  7. Monique Angel (288 comments) says:

    This is rubbish. Pure rubbish, DPF, and the first time I have been compelled to state that about a position taken by Kiwiblog on a political matter.
    I was forced to take out a Student Loan under duress. Most of my generation, who are now tagged as defaulters, were.
    I was raised in an abusive family situation. My mother escaped constant verbal and physical abuse with me and my three siblings She was promptly rooted by the Mother of all Budgets that slashed the benefit allowing her to escape my cunt of an old man.
    We had second-hand school uniforms and were fed from a local foodbank when the benefit didn’t stretch. My Mum doesn’t smoke or drink, the only vice was Bell Tea.
    though, consistently employed by local shopkeepers, she couldn’t completely provide for us let alone save for my tertiary education.
    As one of a class of 1993 I was told that the only way to escape and to go though to tertiary education was to take out a loan. At the age of 17 I was sat down in a school auditorium and told that I would be taking a loan to get an education and I would be able to repay this when I was employed.Ha!
    My tertiary education was hopeless in preparing me for a job in the real world and the cononomic environment in the 90’s was not fritful. I ended up starting my own business. Best success ever in both attaining regular income and paying off my student loan. i don’t have a problem and I’m not in default but I feel for the others of my generation who were rooted by those in political power in your age group DPF.

    You know what my generation thinks? Class of 1993 and 1994?
    Fuck you and your social contract drawn up by the likes of English and Joyce. Only a decade older than my class year (the first year to draw down, it’s pure hippocracy and politicising by individuals who gained a free education and then privatised by stealth what should always be a public investment .
    Ha ha, And good luck with impounding us.

    http://nowoccupy.blogspot.com/2013/05/student-loan-disgrace-new-zealand.html

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  8. Dave Stringer (188 comments) says:

    Some of the courses offered will never return a wage that is sufficient to live on, let alone repay a student loan as well.

    Such an easy truth to prove, just look up the salaries on offer, ten, when you discover you can’tt afford to do that job, because of the cost of qualification (which in the case of aromatherapy isn’t needed anyway, choose another career.

    I do so heartily agree, the breadth and type of corses on offer, especially fro Polytechnics and Wananga, is rediculous!

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  9. davidp (3,580 comments) says:

    Monique Angel>I was forced to take out a Student Loan under duress.

    They forced you to go to university? Thugs! But according to your website, now you’re a property investor living in the US. So you can stop bludging off the rest of us and pay it back.

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  10. Elaycee (4,372 comments) says:

    Only those who think the State owes them a living, could possibly object to the principle that a loan must be repaid. And if the pigeons are coming home to roost for those who opted for a course with little / no value in the real world, then so be it. If anyone thinks otherwise, they should try spinning that yarn at the Bank!

    The reality, of course, is that NZ cannot afford this scheme. It needs to be cut right back. And defaulters should be pursued for monies owed. No question. Someone suggested recently that all recipients of taxpayer funded loans, should have a guarantor. In the event that the student wanted to walk away from their taxpayer loan repayment obligation, the State can call on the guarantor to step up or face recovery action.

    A great idea. Just like stopping defaulters at the border. All for it.

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  11. Monique Angel (288 comments) says:

    It was go to university or join the dole queue davidp. Did you have that choice or did you get free fees paid education?

    And i

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  12. BeaB (2,118 comments) says:

    How often do we baby boomers have to wearily repeat -we did not get a free degree. I got £40 a year in a bursary, Dad gave me 10 shillings a fortnight he could ill afford and I worked every day of every holiday, before equal pay too. As students we were poor and fees, books etc cost a lot. Years ago I saw a comparison I always wish I had kept, putting what we paid into today’s dollars and things weren’t a lot different.
    I’d have loved a loan and admire the young people who pay off theirs as a priority.
    And we need to remember if you stay on a low wage you never have to pay it back so those who are liable are on a good income.

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  13. greenjacket (459 comments) says:

    Monique Angel wrote: “I was forced to take out a Student Loan under duress. Most of my generation, who are now tagged as defaulters, were.”
    OK – if you were forced to take a loan out under duress then have you reported this to the Police ? Have you sought legal remedies for such criminal action?

    Or is it that you are a greedy person who thought you could get easy money for nothing and get away with it?

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  14. Monique Angel (288 comments) says:

    And Davidp: Nah, you and yours can take a flying fuck. I’ll pay it back when I’m good and ready. Oh, and yeah, when I’m not just a housewife.
    How’s a non-earning housewife supposed to pay back a loan you stupid cunt?
    All for it Elaycee? Good luck on finding the requisite population to support you elders in your old age. You know, to wipe your bottoms and stuff?\

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  15. Bad__Cat (140 comments) says:

    While this doesn’t apply to everyone, I remember tossers boasting about taking out interest free student loans and using them for overseas holidays.
    Chickens? Roosts?

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  16. calendar girl (1,215 comments) says:

    Here’s some experience of this problem with one member of my wider family: five years of high life while “studying”, dropping-out of university with nothing but a $35,000 student loan debt, then off overseas for years without any thought of repayments. The debt ballooned (with compounding interest) to $80,000+.

    A generous IRD amnesty scheme and repeated expressions of family indignation ultimately proved to be effective in starting the turnaround. The guy is now back in NZ, working hard without qualifications to earn $70,000 p.a.; his student loan is well under control and will be extinguished in 4 more years; and he’s well on the way to assembling a decent mortgage for a first home.

    Helpful along the way were (a) publicity from Government about the prospect of contacts by overseas debt collectors, (b) family members expressing the fear that ultimately the prodigal “could be locked out of his own country”, and (c) the interest-free nature of the outstanding loan while he is now back working in NZ. Less helpful was (and remains) the individual’s near-impossible-to-understand IRD online student loan account, which seems to have been designed by a pedantic accountant with little regard to the borrower’s obvious question each time he visit’s the page: “How much do I owe IRD right now?”

    From our experience, linking immigration to IRD student loan information should be available for use at both exit and entry transits at the country’s border. If a student loan borrower wants to go on his / her OE, he or she should know (as a condition of the loan) that prior contact must be made with IRD to set up an agreed programme of repayments. Flagging of the passport at or prior to departure will at least will set the scene for an interesting discussion to be held on the person’s ultimate arrival back at a re-entry point. Further IRD enforcement actions against defaulters should then become automatic. A similar procedure should attach to family support obligations for parents moving overseas.

    davidp’s suggestion above about withholding passport renewal also has merit (although it will undoubtedly be claimed to offend against some Bill of Rights clause or a sovereignty-sapping International Treaty to which NZ has obligingly become a signatory). Renewal of a passport should be able to be made conditional on a borrower entering into an enforceable contract backing a repayment schedule – with a guarantor, if necessary.

    My NZ passport requests “all whom it may concern to allow the holder to pass without delay or hindrance and in case of need to give all lawful assistance and protection.” Why should the sovereign government of NZ be expected to seek protection and assistance for me overseas while I refuse, decline, omit or overlook to pay my debts to my home government?

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  17. davidp (3,580 comments) says:

    calendar girl>davidp’s suggestion above about withholding passport renewal also has merit

    It sort of had merit since it would force compliance even if the holder didn’t return to NZ. You’re in a pretty rough spot if you don’t renew your passport overseas and are likely to face deportation at some stage. But, on the other hand, I’m coming around to the arrest idea. Mostly because I’d like to see super-arrogant (“you and yours can take a flying fuck”) Monique Angel spend some time in prison.

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  18. Elaycee (4,372 comments) says:

    @Monique – I think its time you got off your high horse and accepted the fact that, if you refuse to pay back your loan, you’ll be no different to other parasitic bludgers – including those who were quick to ‘take, take, take’ when the opportunity was available to receive a taxpayer funded loan, but then opt to dodge and dart instead of meeting their financial obligations to pay it back.

    It has clearly escaped you – you’re (one of) the reasons that the interest free student loan scheme is currently stuffed!

    PS: Thanks for asking, but my finances are sorted and I’ll be paying my own way in my senior years.

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  19. Judith (8,534 comments) says:

    We need highly skilled and trained people in New Zealand. Many of these students have gained important experience overseas that we could do with here. It just doesn’t seem sensible to prevent them from returning – this country needs to benefit from the investment we made when we educated them.

    Personally I would prefer to see highly skilled people be allowed to return here, but be placed under contract.

    I also think there needs to be targeted areas for loans. Those that have few or no vacancies should be low priority for student loans, those areas that need workers, high priority – perhaps as limited number of loans that are balloted for – to ensure the qualification results in employment, and thus ensure the loan is repaid within a timely manner (preferably within 10 years – any longer and the interest becomes an issue).

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  20. calendar girl (1,215 comments) says:

    davidp: Monique says that she’s not a student loan defaulter, so I have no difficulty with her expressing a fairly strong personal point of view – other than the gratuitous abuse and obscenities that that seems to entail. She’s not refusing to repay her loan, so she appears to be meeting the obligations expected of her. Good on her for that.

    I would love to know, however, what tertiary study Monique undertook with her NZ student loan. That knowledge would allow us all to make some sort of (admittedly remote) judgement about whether or not her career objective was likely to be realistic – as opposed to merely fashionable or fanciful.

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  21. salt (133 comments) says:

    So how many of you fine people keen to put the crunch on student loan debtors had to take out loans for your tertiary education, and how many of you received a virtually free tertiary education pre-1990? How many of you built your comfortable lives without having to earn the tertiary degree that, for today’s under-35s, is more or less a prerequisite for living anywhere but struggle street? Just interested to know.

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  22. BeaB (2,118 comments) says:

    Oh dear, Salt. Every generation has its hardships to face but there are very few of us who ever had it easy. There never were any free lunches.
    I’m glad I didn’t bring up a bunch of whiny kids who think they should get a free ride through life.

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  23. smttc (740 comments) says:

    salt, no such thing as a free tertiary education old boy. Sorry.

    I did my law degree in the 1980s. Tuitions fees were pretty steep and books costs a heap. But I worked 30 hours a week while studying which enabled me to pay for my education, pay rent and living expenses and run an annual surplus of $8,000 to $10,000 a year which meant come end of year I could bugger off to Europe for six weeks instead of having to head off back to Hawkes Bay to work the summer at Watties or the freezing works to pay for the following years education.

    Oh the memories.

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  24. salt (133 comments) says:

    Well, smttc, in the 2000s I worked 20-25 hours a week at a relatively well-paid office job, and that paid my rent, power and other living expenses, but not a hell of a lot else. I did drink a bit of beer, but it’s not like I was dropping a hundy a week on entertainment. Hence I racked up $6k a year for fees, partly paid through working two jobs over summer but certainly not all paid. I had the advantage of being able to live at home over summer too. Plenty of people have neither the advantage of well-paid, consistent work during the year, or the ability to earn truckloads over the summer break.

    If you had a job for nine months a year only which allowed you to pay for everything, you were better off than pretty much every non-international student these days. Just saying, you guys are judging today’s students by a yardstick that no longer applies.

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  25. calendar girl (1,215 comments) says:

    “So how many of you fine people keen to put the crunch on student loan debtors ….”

    Hold on a minute – don’t you mean student loan “defaulters” rather than “debtors”?

    You’re implying that you have to pay virtually all the costs of today’s tertiary degree. If you are talking about a university education, my understanding is that close to 80% of the course cost is met by the taxpayer. As always, there are a student’s living costs as well, but for some less well-off students part of these are met in the form of government grants.

    It wasn’t easy for you for you, salt (why should it have been?), but I too had to work my backside off – in factories, on farms, in shops, and even briefly in cushy job in a school – to get me through my tertiary education. Was just grateful to have the chance, especially as my family couldn’t help with my living costs.

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  26. smttc (740 comments) says:

    salt, I had not one but two jobs and if I was so declined I could have worked 12 months of the year and on occasion did. They were in catering which thanks to Roger Douglas gave rise to lots of events in the 1980s (dinner parties, Wgtn street car races, board meetings etc etc) which provided long hours of employment for ordinary NZers. I was 23 when I started my degrees. So a bit smarter than your usual high school comer lately. My impression was most of them would not work in term even if they had to.

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  27. thedavincimode (6,691 comments) says:

    I was raised in an abusive family situation. My mother escaped constant verbal and physical abuse with me and my three siblings She was promptly rooted by the Mother of all Budgets that slashed the benefit allowing her to escape my cunt of an old man.

    Gee, an “I had it tough (read self-justification) story”. I guess you were the only one. Do you want a medal?

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  28. Tom Jackson (2,553 comments) says:

    I did my law degree in the 1980s. Tuitions fees were pretty steep and books costs a heap. But I worked 30 hours a week while studying which enabled me to pay for my education, pay rent and living expenses and run an annual surplus of $8,000 to $10,000 a year which meant come end of year I could bugger off to Europe for six weeks instead of having to head off back to Hawkes Bay to work the summer at Watties or the freezing works to pay for the following years education.

    And this is how I know you are full of it. A great deal changed between your time at university and Monique’s (I was in the same cohort as her). The general way used to be that you worked the summers as you said and that, along with the student allowance, allowed you to stay basically solvent. All my teachers had paid their way through university just like that, and people slightly older than me had done the same thing. Quite how you got anything other than a mickey mouse degree working 30 hours per week, I’m not sure, but that was not typical. You cannot compare the tertiary sector of 30 years ago. It’s nowhere near the same (I know. I work in it).

    The loan scheme changed all that. Despite having lived away from home and financed a trip around the world, the government deemed my 20 year old self to be dependent on my (far from rich) parents. Hence, I got almost nothing in terms of an allowance and had to borrow the rest. We paid course costs and fees via the loan. Wouldn’t have been all bad, except the jobs you are talking about dried up in the early 90s. Some of my friends were among the last students I knew who got such jobs. Most of us had to make do with part time work, if that. I was lucky and won two big scholarships that helped me through my MA, but most people weren’t.

    It’s no wonder that people leave and default. I don’t blame them. Like most people under 40, they got screwed by their parents generation who pulled up the ladder right as we entered the workforce. You can harp on however you like, but you would do well to realise that there is a very deep seated anger among a great many people my age and younger at the antics of our elders. Political expression of this is in the pipeline. Your protestations are irrelevant. We know you screwed us, and we think you’re basically a waste of space.

    Most people aren’t like me. I went to university to become an educated person in much the same way that people spend a fortune climbing Mt Everest, except it’s cheaper. It worked for me, and I’m now ridiculously overeducated. Others wanted to enjoy the economic benefits they were told tertiary study would supply. Many were sold a bill of goods, and charged an outrageous sum for it.

    I would not send my kids to a New Zealand university now. They suck for the asking price. Better to spend a bit more and send them to a good Australian university.

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  29. smttc (740 comments) says:

    Tom…. urgh. As if I would make shit up.

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  30. mavxp (479 comments) says:

    Both my brother and I have managed to pay back our student loans. We both studied late 90’s, when interest was ‘the going rate’ even while studying (before lollie-scramble politics came in vogue with Aunty Helen). Both of us had issues young people do, figuring out what to do and taking a little longer to finish our educations.

    -He left uni before finishing and worked low wage jobs to gain experience in the ‘media industry’, before summoning the courage to complete his media degree part time. Which he did. He racked up a hefty loan, but despite the fairly modest income since then, has paid it off, done an OE, is now married, bought a house, has a steady job, and a baby on the way.

    -I decided to stay on and complete a second degree (Science then Engineering), racking up what was, for then, a fairly large loan (~60k at its height) despite working every summer in good-paying jobs. But with a decent graduate job, thrifty living, regular pay rises, I had the loan licked in 4 years.

    I really don’t see what the hardship is unless you are completely irresponsible with your life. Even allowing for a few years of “figuring yourself out” it is straightforward to pay it off in a reasonable period of time provided you save and make lump sum payments diligently. I wouldn’t have been able to get an education without a loan (not to mention the tax-payer support for the 75% of the fees I didn’t have to pay), and I am very very grateful to have had the opportunity.

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  31. Monique Angel (288 comments) says:

    No no medal thanks and I didn’t mean to be personally abusive to DPF or anyone else, more in the abstract as in what is going through my generation’s mind. I tend to sit on the edit button but missed deleting one of those last comments. Sorry for the inelegant turn of phrase.

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  32. RightNow (6,986 comments) says:

    What a bunch of fucking cry-babies.

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  33. Monique Angel (288 comments) says:

    Oh, and a profound apology to davidp for calling him stupid. Though I have my suspicions, I actually have no idea of the nature of his intelligence.

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  34. thedavincimode (6,691 comments) says:

    Whereas we have a pretty good idea as to the nature of yours.

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  35. Scott1 (528 comments) says:

    The problem is – that repaying the loan IS optional.

    After you have offered all the sweeteners you can to get students to come back and repay their loans you are just left with the people who don’t really care about returning to NZ and can’t easily repay the loan. Simply NZ doesn’t have the power to chase all these people overseas, just like we are not running around Nigeria chasing Nigerian scammers.

    So we kind of have to suck it up and be pleased about getting anything back at all unless we want to get delusional about the amount of power we wield.

    One day in the future these people may convert to people who do want to return and who can easily afford the loan, I suppose we have to hope for that.

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  36. Scott1 (528 comments) says:

    I think the government should significantly reduce subsidies and loan allowances for degrees that are unlikely to make enough money to pay for the fees they create. I know it is picking winners and it would be hard to do accurately and there would be lots of protest – but I can live with that. Then you can reduce the problem at the top of the cliff rather than at the bottom.

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  37. thedavincimode (6,691 comments) says:

    Scott1

    This issue can’t be considered this issue in isolation from the balance of the debate around tertiary education and in particular, the choice of courses and prospects of future employment and remuneration. It has to be acknowledged that students (read children and idealists in many instances) are taking on debt obligations when they are ill-prepared; either through a lack of maturity or because they simply don’t know what they want to do with their lives and they feel pressured (parents and peers) to undertake tertiary study, they just want to fuck around, or they feel they need to be doing something while they make their minds up.

    The problem starts there and with the availability of bullshit tertiary study that panders to the idealistic leanings of many kids at that age or is perceived as a relatively easy out for kids who have been too lazy at school to take on the prospect of anything useful or challenging in their tertiary study. These kids are making these decisions without having any idea at all as to how competitive it is in the real world and my anecdotal observation is that you can just as easily put choices round courses down to piss poor parenting. Eg there is no excuse for the children of successful graduates to be doing bullshit degrees majoring in Mick Jagger’s pubic hair which is what they can get away with at the moment. Have you ever suffered a financially successful parent trying to justify his/her kids decision to do that bullshit? They tell you it’s “great” and “really interesting” but all the while as you look at them stoney-faced they know exactly what you’re thinking. Socially awkward at best.

    Part of fixing that is knowing that there are consequences at the back end; an obligation to use your degree to earn money to pay back the loan and face consequences if you don’t. The message should be that if you want to study Jagger’s undergrowth, do it when you can afford to pay for it yourself but in the meantime, do something useful. If you don’t know what you want to do, then either do something that hedges your bets and remains useful or spend a year or two digging holes or waiting tables full-time and get some cash together to help pay your way. Moreover, there is so much opportunity nowadays courtesy of the internet and, for example Amazon, to self study. Time digging holes doesn’t need to be wasted from an academic perspective.

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  38. In Vino Veritas (138 comments) says:

    @Monique Angel. Your family situation is unfortunate, but sheesh, what sob story Monique. I graduated in 1988, and came out with a loan. My dad was a truck driver and my mother worked in a supermarket. They could not afford to send me to University, but I went anyway. I had to pay for my accommodation and living costs plus course fees. As did everyone. Free education my arse. Guess what Monique? My loan was from a bank, and there was no option but to pay it back. I hear all these kids today bleating about not being able to, what horse shit. A friend and I set up a business steam cleaning carpets in holidays but I still came out with $13K debt (which was a pretty decent sum back then). I bloody paid it back in 19 months on a salary of $28K.

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  39. Kelly (29 comments) says:

    @Monique you say it was either University or dole queue? your generation? guess what I was the same generation the dole queue was never an option but the armed forces was. Not only did I get my education completed I had a great career that taught me lots so don’t go around blaming society and lack of choice. If you get a loan pay it back simple really

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  40. Monique Angel (288 comments) says:

    Good on you Kelly.

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  41. gazzmaniac (2,307 comments) says:

    With all due respect, the government doesn’t make it easy to pay back student debt if you don’t have a contact in New Zealand.
    It was fine for me – I got my mum to call the IRD and fax through a power of attourney letter to act on my behalf. She was able to get an answer to the question of “If I pay it off today, how much will it cost?” and I gave the money to my mum who gave the money to the IRD. Who fucked it up and didn’t include the 10% early repayment bonus and we had to chase them to apply it to my loan account and close the account, but as far as a dealing with the government goes it’s one of the easier ones. Certainly easier to deal with than Studylink.

    I have a friend who doesn’t think his parents are reliable enough to act on his behalf. He tried calling the IRD from Perth and they woudn’t tell him how much to pay off at once to get rid of the loan, since he doesn’t have a New Zealand address. They also wouldn’t allow him to register for online services, since they need to post a code to a New Zealand address. He has tried on multiple occasions to get it sorted out but in the end he has given up. It’s not worth his time dealing with a bureaucracy that isn’t there to help him – and remember it’s the person who owes the money who was trying to be proactive about paying it back! He has stopped giving a shit.

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  42. In Vino Veritas (138 comments) says:

    @gazzmaniac. And therein lies the issue. If it wasn’t the taxpayer that was funding this, it would be a bank. And guess what gazz? Your mate would definitely give a shit then, since his credit rating would have dropped through the floor. Want a credit card? Think again. Got one? Oops its cancelled. Need a mortgage? Sorry, no cigar pal. Pay your debt. Need hire purchase for that TV? Defaulter. Tough luck, pay your debts. Mobile phone plan? Don’t think so. Credit for that motor you want? Beat it sonny. Pay your debts.
    Tell your mate to get on a plane and come back for a few days and sort it once and for all. It’s really that easy.

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  43. gazzmaniac (2,307 comments) says:

    In Vito,
    If it was a bank, they would have made it easy to find out how much he owed, and provide an easy conduit to pay it back. I don’t blame him for giving up. It’s not like he was trying to get away with not paying, he was actually trying to pay it back. He shouldn’t have to spend over a thousand dollars and a week of his life just to sort out how to pay back a debt – and it still probably wouldn’t have worked, since he still wouldn’t have had a New Zealand address.

    The IRD knows that it has a problem with outstanding ex-pat student loans. The least they could do is make it easy for the ones who want to pay it back to do so. And not play games with the 10% repayment bonus when you do pay it back.

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  44. SHG (312 comments) says:

    I had the unpleasant experience of DISCOVERING recently that I have had a student loan racking up interest for years. Long story, graduated back in the nineties, left NZ and left finances including loan-repayment lump sum in the hands of someone who turned out to be… how can I put this, “not financially responsible”. I tell ya, there’s nothing quite like winding up an estate and finding boxes containing years of unopened mail from the IRD addressed to oneself.

    So I got in touch with the IRD and have been trying to work out how to get this paid off, because rather than the carefree 20th-century idiot who stupidly took out a loan to get an utterly worthless education I’m a 21st-century self-employed mortgagee with two kids, one of whom has special educational needs, so it’s not like I’m sitting on a toilet of solid gold wiping my bum with $100 notes. This is going to hurt.

    But the pain isn’t the thing. Here’s the thing. In my dealings with the IRD I have been left with an impression that it is run by muppets. Emails go unanswered, and my most recent bit of paper correspondence was a letter that arrived on the 13th of May; dated 24th of April, it informed me that I needed to make a 4-figure repayment by the 24th of April. Thanks guys, really helpful. I particularly liked the part of the letter that didn’t tell me anything about how the payment retroactively required two weeks previously could be paid. So I rang the helpline and waited on hold on an international call for 20 minutes to ask if the IRD had a local bank account into which I could make payments because making international transfers to NZ would just piss money away on bank fees. Since the IRD having such a bank account would be eminently sensible, it of course does not have one. Then the friendly and helpful callcentre operator who took my call felt that it would improve my state of mind to drop into conversation the fact that no matter how difficult they made it for me to know when or how to repay money, they were prepared to take every action up to and including bankruptcy proceedings to ensure I was sufficiently motivated. That was awesome. I kinda figured that that was the kind of threat they’d save for the people who were hiding from them, not the people who are calling internationally to try and make some payments.

    So the thing that worries me the most is that prosecutorial decisions are going to be made based on the say-so of a bunch of muppets. Some muppet will forget to update a file or some muppet will tick the wrong box and someone’s going to get arrested at an airport.

    And I have to be honest – this all makes me want to never set foot in NZ ever again. I’ll pay my taxes somewhere else, thank you very much.

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  45. Monique Angel (288 comments) says:

    In Vino: Exactly. It’s worse than sub prime lending. The 1990 National government government dicked up by implementing an invalid business model. Far too much trust in human nature. It lent on future income. Basic premise: When lending always have an asset to secure the line of credit over.
    We all know how lending on future income worked out in the private arena. Caused the GFC which was then compounded by government bank bailouts. It looks like the next GFC is going to be sparked off by the huge mass of student debt floating around the world. The UK is already trying to avert this impending crisis:
    http://uk.reuters.com/article/2013/05/05/uk-britain-studentloans-idUKBRE94406020130505

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  46. Longknives (4,690 comments) says:

    I left University in the late ’90s- Stuck around New Zealand, worked my arse off and paid my loan off.
    I know of dozens of ‘defaulters’ who bolted off overseas…(some of them friends of mine)
    Throw the book at the fuckers.

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  47. Monique Angel (288 comments) says:

    @Longknives: I would suggest that if you think of them as “fuckers”, then they are not actually friends of yours. Is your name Andrew Riches by any chance?

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  48. Longknives (4,690 comments) says:

    Dear God Monique! Please never, ever accuse me of being a Lawyer again…
    What the hell did I do to deserve such a slur??

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  49. Elaycee (4,372 comments) says:

    SGH:

    … left finances including loan-repayment lump sum in the hands of someone…;
    …this all makes me want to never set foot in NZ ever again.

    So, because some muppet spent the money you apparently ‘left with them’ etc, you now opine that you won’t return to NZ and pay off your debts…

    No sympathy from this taxpayer – you deserve everything in the form of debt recovery that’s coming your way.

    You’re simply another reason why the interest free student loan system is stuffed. Because spongers like you hoovered up interest free LOANS but now you want to run away instead of meeting your repayment obligation.

    So much for personal responsibility, SGH – you give me the shits.

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  50. SHG (312 comments) says:

    @Elaycee:

    huh? did you skip reading comprehension at school?

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  51. Elaycee (4,372 comments) says:

    @SGH: Nah… my comprehension skills are fine, thanks – reading and comprehension were actually in the same class!

    The class just before Personal Responsibility 101… the one you missed.

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  52. gazzmaniac (2,307 comments) says:

    I think you missed his point Elaycee – he tried to get it sorted out, but the IRD made it too hard for him. Same position as my friend in Perth.

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  53. gazzmaniac (2,307 comments) says:

    Oh yeah, I forgot to mention.
    If you need to call the IRD from overseas make sure you use Skype. It’s only about 1.5c per minute and they IRD don’t even notice. I’m over wasting money on toll calls just to sit on hold for ages.

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