Loan debt arrest policy could be scrapped

The Government has signalled a hardline student loan debt arrest policy could be scrapped as the details of a fourth defaulter’s arrest at the border emerge.

The most recent arrest was made in May, but has only just been revealed.

Education Minister Chris Hipkins has now indicated the controversial measure, introduced by the last government to claw back taxpayer money, soon could be reviewed.

Asked if the border arrest policy could be reviewed or abolished, a spokesman for Mr Hipkins said he will ‘‘consider options’’ early next year.

New figures showed eight warrants for arrest had been issued as at June 30 and four people had been arrested at the border — one more than previously reported.

All of the borrowers reached a repayment agreement with Inland Revenue.

A student loan annual report for the year to June 30 shows that the overdue amount was $1.2 billion in the past year, an increase of 12.4% from 2016.

The increase in both the overdue amount and the average amount outstanding was mainly driven by defaulting overseas-based borrowers who owe $1.1 billion in overdue repayments, compared with $99 million owed by borrowers based in the country.

The student loan annual report showed the amount of debt wiped because of bankruptcy rose from $17.6 million to $19.9 million. Debt written off because of death dropped to $12.6 million. 

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