Graduate sore at student loan bill after getting stuck in Perth
A University of Otago graduate who lost her job and flat after getting stranded in Perth, when the trans-Tasman bubble closed, is having to make a $2772 student loan repayment because she is now classified as an overseas-based borrower.
Annelise Kovaleski said she left New Zealand at the end of July to attend her brother’s wedding in Perth, not giving much thought to what might happen to her student loan if she got stuck there. ‘‘The borders closed two days after I got there, and I was stuck.’’
Kovaleski tried for five months to enter the managed isolation and quarantine (MIQ) lottery until, on her ninth attempt, she secured a room for late December.
In November, she received a letter from Inland Revenue saying that once she had been out of New Zealand for 184 consecutive days, she would be considered an overseasbased borrower, which meant she would no longer qualify for an interest-free loan and repayments would be based on her loan balance.
Kovaleski said she spent 160 days in Australia all up and was under the impression that she would not be considered an overseas borrower until she had been away for 184 consecutive days. She did not realise that she had to be at home for 31 days within that timeframe.
Inland Revenue’s website says when student loan borrowers depart New Zealand, after 184 days they become overseas-based if they are out of New Zealand for at least 153 of those 184 days. So, by the time 184 days since Kovaleski’s departure rolls around, she will have been in New Zealand for only 24 of those days. She said that in the time she had been back in New Zealand she had received three letters from Inland Revenue saying she needed to pay $2772 because she was classified as an overseas based borrower.
‘‘It is not my fault I got stuck overseas. I lost my job and I lost my flat from being stuck overseas, and now I am expected to pay all this money.’’
Kovaleski said Inland Revenue should be more understanding of people who were stuck overseas but based in New Zealand.
‘‘It just seems that there is no acknowledgement of the fact that people are overseas against their will. Penalising them as overseasbased borrowers is awful.’’
People with student loans stuck overseas were already having to pay MIQ costs to get back into the country. To then have to make lump sum student loan repayments was not fair, she said. ‘‘I am very stressed about how much money I have to pay in a very short amount of time.’’
She said she was being asked to pay about $800 by February 22 and $2000 by March 22. If she did not pay by the due date, she would be charged late payment interest at 7 per cent, a letter sent to her said.
Inland Revenue’s website says when borrowers are based overseas, they need to make minimum repayments on their student loan. Repayments differ depending on the size of the loan.
For people with loans over $45,000 and up to $60,000, they need to repay $2000 twice yearly.
Kovaleski’s loan amount fell into that bracket, she said.
The website says borrowers can apply for a temporary repayment suspension for up to a year while they travel overseas.
Inland Revenue spokeswoman Gay Cavill said they needed to apply before they left or within six months of leaving.
Kovaleski said it was not clear what would happen regarding interest accrued on her student loan.
New Zealand-based borrowers are entitled to an interest-free student loan and loan repayments are based on income, Inland Revenue’s website says. If a borrower is outside of New Zealand for around five out of six months, they might become overseas-based and their student loan will stop being interestfree, it says.
Cavill said Inland Revenue had a range of relief provisions available.
‘‘The best first step is for the customer to contact us so that we can consider their situation as each case is decided on its merits,’’ Cavill said.
‘‘Customers can use the secure email within their myIR account to send us a message and we will work with them to reach a solution.’’