People living overseas with overdue student loans face arrest at the border, and older students' eligibility for loans and allowances has been dramatically cut as a result of Thursday's Budget.
The Budget includes measures aimed at cutting cutting nearly $30 million from the cost of student loans and allowances in 2013-14.
Borrowers based overseas will have to make fixed annual repayments and the arrest system currently used for people who owe child support payments will be extended to the most non-compliant overseas-based borrowers.
The Budget extends the period for which new permanent residents and Australians living in New Zealand are ineligible for loans and allowances from two years to three years.
From the start of next year people aged 65 and over will no longer be eligible for student allowances, and those aged 40 or more will be eligible for only 120 weeks of allowances over the course of their lifetime, down from 200.
Tertiary Education Minister Steven Joyce says the Government will use a debt collection agency to track down about 10,000 student loan borrowers who are living in Australia and have made little or no effort to repay their loans.
