The Inland Revenue Department will be able to recall student
loans in full under legislation passed by Parliament today.
Revenue Minister Peter Dunne said the vast majority of
borrowers met their repayment requirements and had no reason
to worry, but serious defaulters would be dealt with.
"This bill allows Inland Revenue to recall those loans in
full, with outstanding interest and penalties," Mr Dunne said
during the third reading debate on the Student Loan Scheme
Bill.
"This is not a harsh move. It is about fair and appropriate,
real world consequences of the same sort you would face if
you continued to remain in serious default on your mortgage."
Mr Dunne said it was "the last option" for dealing with those
who consistently reneged on their repayment responsibilities,
and would only be used when all reasonable efforts had
failed.
He said the first cases for recall would involve a number of
borrowers who were in Australia.
The bill also makes it easier for borrowers to manage and
repay their loans through on-line services and a simplified
system of penalty rules.
"This will eliminate much of the administrative complexity
and confusing paperwork that has made things more difficult
for student loan borrowers than they needed to be," Mr Dunne
said.
"Most borrowers whose income is from salary and wages will
benefit from a further simplification which removes the
current annual end-of-year assessments or `square-ups'."
Labour supported the bill but complained about the $40
administration fee for the new, streamlined service.
MP Grant Robertson said Inland Revenue was going to save
money from the new scheme, and the administration fee was a
revenue-gathering exercise.
The Union of Student Associations (NZUSA) said the
legislation was a mixed bag -- administrative changes were
welcome but the new fee was "an unnecessary tax" on students.
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