People Against Prisons Aotearoa

Abolitionist Demand 18: Decriminalise student loan defaults.

This is a part of No Pride in Prisons’ Abolitionist demands. These demands were originally published as a book. To see a pdf of the book, click here. To buy a copy, please email info@noprideinprisons.org.nz

Section 162A of the Student Loan Scheme Act 2011 makes it a criminal offence to default on a student loan from abroad. This crime carries a penalty of up to three months imprisonment. As reported by RNZ, nearly 70% of the 110,000 people abroad with student loan debts are in default.^[1] This has led to a palpable fear among defaulters that if they return to New Zealand, they will be arrested.^[2]

Before 1989, tertiary education in New Zealand was free.^[3] Now, students from less-privileged backgrounds are not only shackled with lifelong debts, but are also at risk of being incarcerated because of this debt. The problem of massive student debt was created by succeeding governments and is the fault of those governments. Not only are students expected to pay for something that was fully-funded by the state thirty years ago, but they are also charged exorbitant rates of interest when they go overseas and then potentially exiled from New Zealand or jailed, just for getting an education.^[4] This is a punitive policy that must be repealed immediately.

^[1] Tom Furley, “Student Loan Arrest Prompts Overseas Repayment,” Radio New Zealand, 4 April 2016. http://www.radionz.co.nz/news/national/300616/student-loan-arrest-prompts-overseas-repayments.

^[2] Nicholas Jones, “New Zealanders Scared to Come Home Due to Student Loan Arrest Threat,” New Zealand Herald, 3 June 2016. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11649957.

^[3] Ron Crawford, History of Tertiary Education Reforms in New Zealand, (New Zealand: New Zealand Productivity Commission, 2016), 2. No Pride in Prisons is committed to the reintroduction of free, fully funded tertiary education for all students.

^[4] Inland Revenue, “Interest-free When You’re Overseas,” Inland Revenue, 11 May 2016. http://www.ird.govt.nz/studentloans/overseas/interest-free/sl-interest-free-overseas.html.