2 Jan 2013

42,000 students overseas in default of loans

6:06 am on 2 January 2013

More than 42,000 former students have vanished overseas owing $418 million on their student loans.

The Inland Revenue Department is to announce a contract in a few weeks to a debt collection agency that has been selected to locate them.

IRD said it has collected $42 million over the last two years from other students who went overseas and were behind in repaying their loans.

Collections manager Richard Owen said the department has assigned a number of its workers to locate people and encourage them to make repayments.

He said interest on the loans begins after 183 days outside New Zealand and will not go away just because they have.