‘I’m very stressed’: Student stung with $2,772 student loan bill after getting stuck in Perth
A University of Otago graduate who lost her job and her apartment after being stranded in Perth when the trans-Tasman bubble closed has to repay a $2,772 student loan to Inland Revenue because she is now classified as a foreign-based borrower.
Annelise Kovaleski said she left New Zealand at the end of July to attend her brother’s wedding in Perth, without thinking too much about what might happen to her student loan if she was stuck there.
“The borders closed two days after I arrived and I was stuck,” Kovaleski said.
She tried for five months to participate in the MIQ lottery until on her ninth attempt she got a room for the end of December.
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In November, she received a letter from the Inland Revenue stating that once she left New Zealand for 184 consecutive days she would be considered an overseas-based borrower, which meant that she would no longer qualify for an interest-free student loan and that repayments would be based on his loan balance.
Kovaleski said she had been in Australia for a total of 160 days and felt she would not be considered an overseas borrower until she was away for 184 consecutive days .
She said she didn’t realize she had to be home for 31 days within that time frame.
The Inland Revenue website states that when student borrowers leave 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 have passed since she left for Australia, she would have only been in New Zealand for 24 of those days.
She said by the time she was back in New Zealand she had received three letters from the Inland Revenue saying she had to pay $2,772 because she was classed as an overseas-based borrower.
“It’s not my fault I got stuck overseas.
“I lost my job and lost my flat because I was stuck abroad, and now I’m expected to pay all that money.
Kovaleski said the Inland Revenue should better understand people stranded overseas but based in New Zealand.
“There just seems to be no recognition that people are abroad against their will.
“Penalizing them as foreign-based borrowers is awful.”
People with student loans blocked abroad already had to pay the MIQ fee to return to the country. Then having to make lump-sum student loan repayments was not fair, she said.
“I’m very stressed about the amount of money I have to pay in a very short time.”
She said she was being asked to pay around $800 by February 22 and $2,000 by March 22.
If she failed to pay by the due date, she would be charged 7% late payment interest, according to a letter sent to her.
The Inland Revenue website states that when borrowers are based overseas, they must 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 must repay $2,000 twice a year. Kovaleski’s loan amount fell within that range, she said.
The website says borrowers can apply for a temporary repayment suspension for up to a year while traveling abroad.
Inland Revenue spokeswoman Gay Cavill said they had to apply before they left or within six months of leaving.
Kovaleski said it was unclear what would happen regarding accrued interest on his student loan.
New Zealand-based borrowers are eligible for an interest-free student loan and loan repayments are income-based, the Inland Revenue website says.
If a borrower is out of New Zealand for about five out of six months, they can become based overseas and their student loan will cease to be interest-free, he says.
The Inland Revenue did not respond to specific questions about why it was forcing student borrowers to repay as overseas-based borrowers if they had been stranded overseas longer than expected. due to government MIQ lottery.
Cavill said the Inland Revenue has a range of relief provisions.
“The best first step is for the client to contact us so we can review their situation as each case is decided on its merits,” Cavill said.
“Customers can use the secure email in their myIR account to send us a message and we will work with them to find a solution.”