Student Loans



  • @taniwharugby said in Alternative needed from the absolute crap of stuff.co.nz:

    @voodoo not mis-understanding it, you see it as handcuffing, I see it as a benefit to staying/returning in/to NZ.

    Some of those who left NZ, CHOSE to cease or never make payments, and as such, rightly have penalties on thier interest payments...

    In NZ we are screaming out for Nurses, teachers etc, plenty of these qualified people are no longer in NZ, they left for higher wages, I am sure some of these have chosen to ignore paying off thier student loans...I always think back to when my kids were born and my experience with the people at the hospital; I would have said at least half of the people we dealt with (Dr, Nurses, anesthetist, admin staff etc) were foreigners, over half of these were British...met a number of teachers, but probably lower % who are also foreigners...so our qualified people buggar off for money, have to assume these ones come to NZ for lifestyle.

    @mariner4life you are an exception!

    i am exceptional. thank you

    it's not that easy though is it. Not everyone that leaves does it for mercenary reasons. Some leave for a change in lifestyle. They then build new lives, and then suddenly they have too many roots down to just come back to NZ.

    I can absolutely see @Mokey s point, even if she probably said it a tad harsher than i would. However, as with most things, it's not exactly black and white.

    My point is more the interest rates on student loans have always been too high, and not to market. Also a 4 year degree is pretty fucking expensive when your parents make too much to allow you to get an allowance, but don't make enough to actually pay for any of your schooling/living.



  • @Mokey said in Alternative needed from the absolute crap of stuff.co.nz:

    @voodoo Your point is stupid. Those who remain in NZ are contributing to the government and economy via taxes (PAYE, GST etc) those who leave contribute nothing. Why should they get the same benefit?

    My point is stupid? Nice argument.

    You realise that those that stay are also consuming right? That's why they pay tax?

    Why on earth should somebody pay a PENALTY to work overseas? That's so small-minded, I'm just staggered.

    What would you say to a hypothetical where a 40yr old professional couple with 2 kids get an opportunity to work in Singapore for 2 years. They'd love to go, but they really can't make the financials work because the government has a policy that your mortgage rate goes up by 8 full % points if you move.

    Yeah that sounds fair. Explain to me why it's different?

    I am all for proper penalties for those who decide not to pay their loans back. But charging someone a penalty for choosing to live overseas WHILST PAYING BACK THEIR LOAN is just daft and backwards.

    We live in a mobile society, people don't want to be stuck in a certain country or city or environment. These sorts of attempts to force them just make no sense.



  • @taniwharugby absolutely those foreigners would be here for lifestyle, as are those kiwis that do the same overseas in Britain and elsewhere. Why should either cohort be penalised?

    As I said, I'm all for cracking down on non-payers, whether in NZ or offshore. Happy for ratcheting interest, penalties, travel restrictions etc whatever the law allows for defaulting borrowers of the government.



  • @voodoo said in Student Loans:

    Why on earth should somebody pay a PENALTY to work overseas? That's so small-minded, I'm just staggered.

    At the time, Labour wanted graduates to stay in NZ. Presumably it's economic activity they want - but the only-in-NZ-no-interest was there from the start.

    Personally, I'd have a happy medium of lower interest for student loans, and leave the rest alone. Something like 2-3% makes a massive difference to the cost, incentivises payback, but isn't as crippling as the 7-10% that floated about for a few years.



  • @nzzp Yeah I get the intention. But I think it's really misguided in the modern world.

    I'd also be fine with a consistent, low interest rate for all borrowers . And consistent, high penalties for those who disregard their obligations.



  • @mariner4life it's IRD, they always make you pay more.

    I wasnt suggesting people did leave for mercenary reasons...just saying if someone chooses to leave without making any arrangements to start paying thier debt, fuck em!

    I have an older son who I have not been with his mother since he was 6 months old, when I left on my OE I set up a private arrangement with her to carry on making payments for child support, otherwise when I came home, I'd have been smashed with a huge bill...appreciate this is only slightly relevant, but I knew if I chose to do nothing, I'd have had a big bill when I came back, and to be naive enough to think who cares, I'll never come back...

    @voodoo I went to the UK to make some coin as well (I met my wife there, so didnt make as much, but oh well) saved enough to have almost 50% deposit on a house...but yes, you go for the experience, but people do go to make money too.

    I have no issues with them providing better options for those leaving NZ, but I think offering the 'best' (0% interest) option to those staying is definitely the way to go.



  • It did sound like she actively engaged with them in the past but couldn't negotiate a plan. She was also self aware enough to know what was coming on social media. IRD seem to be more compassionate now whereas in the past they were way more cutthroat as my lil bro and some other mates found out. Even though they said a bunch of nice things.

    I got stung by the interest while studying and it was (still is) utter bullshit to have it compounding as you studied.

    I'm a bit on the fence about zero interest only if you are in NZ. I'd like to see a 2 year OE type zero or minimal interest for those overseas... not sure about how hard to go on those who leave never to return, or people who intend to come back but are away for years.

    Ultimately we want those folks working in NZ, esp if they studied in skill shortage jobs. But it'd be good not to be utter heartless about it all. But bottom line is you borrowed the pingas, you pay it back.



  • If we truly believe that tertiary educated people have some obligation to serve in NZ afterward, we really should take the loan piece out of the discussion. Why should it be different for a rich kid whose parents pay their way than for an average kid who has to borrow to study? Shouldn't everyone have to pay the same leaving penalty?

    And for that matter, shouldn't the penalty also apply to high school grads, 13 years of free public education ain't cheap and must deserve some service?



  • My wife and I got caught up in this and yes entirely our fault. These are just excuses but I didn't do enough to setup automatic payments, it was a bit of a mission to transfer the money to NZ via a third party site. We also had a mortgage and other costs and we didn't do enough to set aside money for the student loan. We were then getting stung the high interest rate of 7%, and then penalties start getting piled on if you didn't make the minimum payment. I think our original debt of 28k climbed to 100k, and the issue was we had been making some payments and were not really making much of a dent.

    It got a little overwhelming tbh, when the law came re being arrested, I didn't want this to happen should one of my parents die. So I actually remortgaged the house and paid off the entire amount. The interest rate on the house was way lower than the student loan and penalties.

    Overall a pretty shitty experience that was totally our own doing.

    Pretty sure Australia does not charge any interest if you go overseas, the debt waits for you. Catch is I think it grows with inflation.

    I am just happy to see NZ has gone back to cheaper Uni, would have helped me out for sure.



  • Well I was one of those morons who took out a loan thinking it wasn't real, studied something mostly retarded, graduated never to work in the field of my study and shot off overseas to party it up with my head in the sand of the potential consequences.

    Thankfully two things saved my ass 1) Poor family so got full student allowance 2) I set my old man with rights over my IRD account and he applied for a repayment holiday for me. By the time my head started to be screwed on better the damage wasn't too bad and I managed to finally knock it all off a couple years back.

    I have some sympathy for highschool age retarded me. 17 is waaaay to young to be making incredibly expensive decisions on your life without decent guidance. We had a representative from Massey Uni come to discuss our options at highschool, the fuckhead sold me on a BA because it covered so many areas and would set me up. I had no other adult guidance so just bought it hook line and sinker.

    I get to uni as barefoot long haired, Che wearing mongaloid reading the student paper, rubbing shoulders with like minded mongaloids in philosophy, psychology, sociology, politics, history etc and we were convinced that student loans were going to be wiped clean in a couple years. I believe it was a resurgent Alliance party that was pushing that at the time? I mean free tertiary education is a human right! Learning that gender is a social construct and that Marx was a swell guy was bound to make society a better place!

    I can only imagine there will still be a significant cross-section of students in universities today who are in that same trap except it may even be worse to some degree with even more retarded courses than what I did with certain politicians and personalities thriving on student ignorance for their own benefit.

    What I'd love to see is some sort of financial literacy being covered in highschool so at least 17 year olds without decent guidance might have a fighting chance...that's not to say I would have listened at the time but at least then I wouldn't have any sympathy now.



  • @Rembrandt I enjoyed that, thanks for posting it! 😅



  • @Rembrandt said in Student Loans:

    What I'd love to see is some sort of financial literacy being covered in highschool so at least 17 year olds without decent guidance might have a fighting chance...that's not to say I would have listened at the time but at least then I wouldn't have any sympathy now.

    Holy crap, this! Compounding interest should be drilled into people's heads - the terms some folk sign up for absolutely bamboozle me.

    alt text





  • @nzzp said in Student Loans:

    @Rembrandt said in Student Loans:

    What I'd love to see is some sort of financial literacy being covered in highschool so at least 17 year olds without decent guidance might have a fighting chance...that's not to say I would have listened at the time but at least then I wouldn't have any sympathy now.

    Holy crap, this! Compounding interest should be drilled into people's heads - the terms some folk sign up for absolutely bamboozle me.

    alt text

    It’s not hard. If you don’t pay your loan, the interest gets added to it.

    It’s a killer in a high interest environment, especially if you signed up to your loan in a low, and never really understood it.

    The UK law is very good here in the disclosure which must be made under and financing deal. One thing to have a headline saying drive the new ford xxxx for 299 p/month. It’s another showing you the real interest is 13.5% and you’ll end up paying 30k in real cash for a 22k car.



  • @chimoaus said in Student Loans:

    Pretty sure Australia does not charge any interest if you go overseas, the debt waits for you. Catch is I think it grows with inflation.

    Yes this is the case. It's not much of a catch though as for most between the ages of 18 and 40 a loan that only rises with inflation is going to be the cheapest money you can get. The system used to be great too because if you made voluntary contributions there was a 15-25% bonus.

    About two years ago the Australian government changed the rules and demanded that Aussies overseas with HECS/HELP debt had to make payments on their worldwide taxable income once over the $50k treshold. Their ability to enforce that is obviously nil outside of those returning to Australia - but per an accountant mate of mine people have been picked off at the airport returning for this.



  • This piqued my interest:

    In 2018, overdue student loan debt was $1.5 billion, with overseas-based borrowers owing 91 per cent of that.

    Clearly those overseas-based people who are paying back their student loans are a very small minority.



  • @Bovidae said in Student Loans:

    This piqued my interest:

    In 2018, overdue student loan debt was $1.5 billion, with overseas-based borrowers owing 91 per cent of that.

    Clearly those overseas-based people who are paying back their student loans are a very small minority.

    What would be interesting is how many of those 91% want to return to NZ but their debt is so overwhelming they choose to ignore it. So instead of the scheme keeping talent in NZ it may actually be keeping it out.

    You have to wonder why so many people are in this boat. As mentioned the 7% compounding interest and penalties cause the most issues. I think we were close to 8 or 9 grand a year in interest and penalties alone. Another issue for us was I forgot to update my overseas address with IRD so I never got any statements or updates. Yes this is my fault again but I am sure I am not alone.

    Anyone have any idea what system would work better or what they could do to encourage payment?



  • @chimoaus said in Student Loans:

    @Bovidae said in Student Loans:

    This piqued my interest:

    In 2018, overdue student loan debt was $1.5 billion, with overseas-based borrowers owing 91 per cent of that.

    Clearly those overseas-based people who are paying back their student loans are a very small minority.

    What would be interesting is how many of those 91% want to return to NZ but their debt is so overwhelming they choose to ignore it. So instead of the scheme keeping talent in NZ it may actually be keeping it out.

    Remember if they come back, it goes interest free. So probably not many



  • Why aren’t any of you asking Andrew Little why he’s not agitating in Cabinet for a wind back of the entire scheme? When he was president of the NZUSA it was his main focus. At the time he was fundamentally against the concept of tertiary fees funded by loans. Now he’s very quiet on the matter.



  • @MajorRage the finance industry in NZ has changed alot in the past 10-15 years, with more regulation, I expect (hope) the student loans today are regulated differently with disclosures and the like, whereas in the past, I expect it was more "how much you want?"

    Many years later: "Oh, you didnt start paying it back, bummer dude!"



  • My sister moved to Aus straight after graduation in about 2002, having completed a Master's. She's basically paid the minimum for the last 17-18 years and her loan balance is still sitting around $100k. Meanwhile, she took a year off work a couple of years ago to travel the world (well, she quit her job while on long service leave & kept travelling), and doesn't seem to be overly fussed. She still is thinking about coming back to NZ to work, but she's 43 now - if she does that, she'll be paying it off until she's at least 60 even if she gets a job that pays similarly to her Sydney gig. My aunt and I have both encouraged her to have a stronger crack at paying back the loan, but it doesn't seem to be getting through. Still, it's her funeral (as long as I don't have to pay for the casket).



  • @Smudge said in Student Loans:

    . My aunt and I have both encouraged her to have a stronger crack at paying back the loan, but it doesn't seem to be getting through. Still, it's her funeral (as long as I don't have to pay for the casket).

    There's something to be said for ignoring it if it's interest free. Basically just an extra tax on income over a certain amount. I brought back a house deposit and a loan, rather than being broke and no loan. Made sense at the time



  • @JC because there isn't a shitshow of a higher level of funding for tertiary study imo. Fees free (should have been free last year of undergrad, not 1st) has only gotten moderate uptake. But it may pick up steam this year.
    I reckon tinkering with the existing system is a better approach, but how you balance things for overseas v NZ based, and defaulters in either camp is challenging.



  • @nzzp my workplace offets super or student loan contributions. It was a no brainer to stick with minimum repayments on the loan and crank the super $$.

    Ugh, knew a mate from college who chalked up a 50k loan then bailed on uni without finishing. If you took living costs, the 1k(ish) for books etc, then your fees it adds up real fast. I think she ended up off the grid in motueka so who knows how that turned out.

    Still, enjoyed my boozy end of first year hol in Fiji though. Lol my dad also got me to re-carpet the lounge via my loan as the rates were cheaper than the banks. Fair enough as I didn't have to pay rent 😁



  • @nzzp said in Student Loans:

    @Smudge said in Student Loans:

    . My aunt and I have both encouraged her to have a stronger crack at paying back the loan, but it doesn't seem to be getting through. Still, it's her funeral (as long as I don't have to pay for the casket).

    There's something to be said for ignoring it if it's interest free. Basically just an extra tax on income over a certain amount. I brought back a house deposit and a loan, rather than being broke and no loan. Made sense at the time

    Oh for sure. But she's in Aus, so it's not.



  • @Paekakboyz TBH, if those overseas showed a genuine ongoing commitment to paying back their loan, I would support the govt in lowering the rate or perhaps forgiving a certain amount of interest.

    But those who are all 'WAH I took out a huge loan, haven't paid back a cent, won't talk to the IRD, ignored hoping it would go away and now I owe heaps and they will arrest me at the airport WAHHHHHHH' folk can all go eat shit.



  • My first few years at uni were a good earner. Low fees and getting a student allowance/bursary. But I had friends who had maximum bank overdrafts back then, purely for entertainment expenses. That included a new stereo for their flat!



  • Yeah a glaring weakness of the scheme in my day was the lack of distinction between fees and expenses. Student fees are unavoidable. Expenses can be managed, but mostly, weren’t.

    I’ve never forgiven the government for the clear holes in their Student allowance scheme. Nothing like watching you dairy farmers pals get picked up in a brand new SS whilst taking full allowance whilst your teacher parents pick you up in a 10 year old Corona when you get zero.

    Then going to your other friends parents beachfront
    Batch in pauanui for new years, who also collected full student allowance.

    That was my first real foray into establishment distrust.



  • It is odd that the government hasn't managed to establish agreements with their counterparts in Oz and the UK to collect loan repayments direct from the relevant tax authorities. You'd think those 2 countries alone would comprise > 50% of defaulters?



  • @Bovidae remember the size of those stereos? Half the people in my hostel (not me) went and bought those giant things that take 6 Cd's at a time on rotation.



  • @Bovidae said in Student Loans:

    I had friends who had maximum bank overdrafts back then, purely for entertainment expenses. That included a new stereo for their flat!

    Not to mention cars and skis.....



  • @MajorRage man, that brings back memories of unfairness of student allowance and means testing/parental income. Had a few in our circle with similar situations. Luckily they were generous folks 😁

    Also remember how it was lump sum payments... can't recall the minimum but do recall how easy it was to call up and get money! I think there was a $50 admin fee so I'd take a larger amount rather than multiple withdrawals.

    Jeez, it was pretty loose looking back on it!



  • @Paekakboyz said in Student Loans:

    means testing

    Is an arbitrary system anyway, for student loans or anything else. It will inherently catch some that need help and won't get it, and vice versa.

    The people that have worked hard and saved all of their lives, with all of the taxes that are associated with that, pay more - again. That is wrong IMO.



  • @voodoo NZ and Aus IRD have an arrangement for some stuff dont they?

    IIRC Baycorp (are they still a thing?) operated in both countries, but they were limited as to what info could cross the Tasman.



  • @taniwharugby said in Student Loans:

    Baycorp (are they still a thing?)

    Yes. I had the choice of using them, or turning the hideous old witch that owes me money into some sort of clothing. The latter was repulsive (even though she deserves it), so I signed up with Baycorp.



  • @Snowy I know years back when I was doing recoveries we'd put stuff with Baycorp and if we knew the person was in Aus we would tell them and they could pass some info across but powers were limited



  • @taniwharugby This is an all NZ deal, but one of the questions to sign up was to do with the collections between the countries. Baycorp are in both but operate pretty independently it seems.



  • @taniwharugby yeah, I meant more that IRD and the ATO should have an agreement that any Kiwi with debt should have the same 10% taken straight from their income. Try to get repayments happening before the big build up and eventual defaults.

    When I still had my loan and was working in Oz, they were entirely reliant on me making semi annual payments (which I did, but it seems many did not)



  • @Paekakboyz said in Student Loans:

    @JC because there isn't a shitshow of a higher level of funding for tertiary study imo. Fees free (should have been free last year of undergrad, not 1st) has only gotten moderate uptake. But it may pick up steam this year.
    I reckon tinkering with the existing system is a better approach, but how you balance things for overseas v NZ based, and defaulters in either camp is challenging.

    That’s not really answering my question. If people are concerned that the existing system is inherently unfair in some aspects, why not lobby a senior minister who is record of being philosophically opposed to it? At the very least he would be obliged to explain what has changed and why the parts of the system people like @voodoo dislike should stay. As with most things, if someone doesn’t like something they should work to get it changed.



  • @voodoo I think NZ and Aus IRD (or whatever aus is called) have a reciprocal arrangement when it come to child support, but not alot else, would be beneficial to extend it.


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