It seems that whichever government is elected to lead New Zealand at the 17 October election, the provisions for student loan borrowers will become less favourable. The ACT Party wants to abolish interest free loans for domestic students. Labour will not be proceeding with the rolling out of its fees free policy to the second year of tertiary study, and it has also abandoned its promised post graduate student allowance.

If you are thinking about studying, our advice is to investigate whether you have the option to study in another country (many don't charge fees or have a more generous scholarship tradition or aren't as harsh, as New Zealand, on student loan repayment policies). The impact of Covid would also need to be taken into account.

If you are interested in IT, there are many free, or low cost, options which can open the door to the same types of jobs as if you had spent thousands of dollars studying for a 3-4 year degree. In fact, Google has recently announced that it will treat people graduating from a short course the same as 4 year degree graduates. The course's cost is estimated to be around $300 and this could net you a job paying around $90,000 a year. There are choices available that could avoid a massive future debt.

It is reported that more than 5500 overseas-based student loan borrowers have returned to New Zealand since April 2020.

If you are one of these people, these points may be useful:

• You need to let the IRD know that you have returned. 
• Your obligatory payment obligations will change from a flat amount to an income based amount. Some returnees will now have no obligation to make payments (if their income is low and they have no arrears), and others will have to pay more.
• If you have overdue arrears you are now an easy "target" for the IRD to take action against, if you do not resolve them ASAP. The most common methods for dealing with overdue arrears are a hardship application, a payment arrangement, or lump sum payment offer. For some people, bankruptcy may be an option, but, in general, the implications are significantly harsher than if you were living outside New Zealand. If you do not deal with your arrears, the first step taken by the IRD may be to send a letter to your employer garnishing your pay. They have many other tools available. Delaying dealing with arrears is not an option if you are living in New Zealand.
• If you would like to discuss your situation or options, in confidence, please contact us.

The Levy Institute of Economics' research shows that full student debt cancellation would put billions of dollars back into the economy.

​Instead of paying back debts, bloated by interest and penalties, to the IRD, people could spend directly on goods and services, providing an immediate boost to businesses, and allowing the former student loan borrowers to plan for their future by saving for a home, baby, business or retirement. Other sectors of the economy have had billions of dollars poured in to keep them afloat. Helping those who are struggling, and providing a financial life raft, is the right thing to do. Student loan borrowers in other countries have been helped by their governments, why not New Zealand?