Performance & Optimisation
55 Featherstone Street
PO Box 2198
30 November 2017
Mr Hayden Foote
[FYI request #6824 email]
Dear Mr Foote
Thank you for your request made under the Official Information Act 1982 (OIA),
received on 10 November 2017. You have requested the following information:
I am an Overseas Based Borrower (OBB) with a hefty student loan. I have made
multiple attempts at arranging a repayment program. At every avenue, I have
been told there is no provision for the interest to be halted. I flew to NZ and had
a face to face meeting with IRD and was told that interest free deals cannot be
offered due to legislation. I have since discovered that many OBB’s have in fact
been granted interest free repayment plans.
Please tell me, how many Overseas Based Borrowers have been granted interest
free repayment plans?
On 20 November 2017 we contacted you in an attempt to clarify your request. In
summary, we asked you to explain exactly what you meant by ‘interest free’ and if by
‘interest free’ you were referring to loan interest or late repayment interest. As we have
not received a response from you, we are responding to your request as it currently
stands. Information to be released
No Overseas Based Borrowers have been granted interest free repayment plans.
is charged on the overall student loan balance. There is no provision for
loan interest to be remitted for an overseas based borrower under the Student Loan
Scheme Act 2011 (unless it is reversed because it was incorrectly applied).
Sometimes borrowers living overseas can be deemed to be New Zealand-based
borrowers if they meet certain criteria. By being deemed New Zealand-based, they will
not be charged interest on their accounts. These are borrowers such as those from
Realm countries (Niue, Cook Islands, Tonga, Tokelau), members of New Zealand’s
armed forces that are stationed overseas, or, in some cases, people studying overseas.
In order to be deemed New Zealand-based, the borrower must adhere to stringent
criteria and all repayment obligations must still be met.
Late payment interest
(known formally as late payment penalty) is charged on a
borrower’s account when they have an amount overdue. Late payment interest can be
remitted in certain circumstances and Inland Revenue will often negotiate full and final
settlement payments based on a remission of late payment interest. Late payment
interest is supressed while under an instalment arrangement if the payments are being
met each month. A penalty will be charged each time the instalment payment is not
Thank you for your request.