Need to pay back student loan

A man was arrested at Auckland airport for not paying back his student loan.

In 2004, he owed $22,000. This was from a student loan, money he borrowed while he studied at Auckland University. He is now a teacher in the Cook Islands and has not paid back his loan. The loan started at $22,000, but now with interest and penalties for not paying, he owes a large amount.

He was on holiday in New Zealand but when he tried to leave on Monday, he was arrested. The Inland Revenue Department (IRD) has said for some time that people who did not pay back their student loans could be arrested. He is the first person to be arrested for not paying back his loan.

Other people could be arrested too. About 80,000 people have not kept up with their repayments. In total, about $850m is owed to the IRD. Many of these people live overseas and are afraid to come home because they could be arrested.

Students do not pay interest on their loan while they are studying. They do not have to start paying back their loan until they earn a certain amount. Interest on the loan increases the amount that they owe and if they don’t make regular repayments, penalties are added. The debt to the IRD soon becomes huge.

Listen to April 18 2011 to hear more about student loan repayments.


• penalties – extra money added
• Inland Revenue Department – tax department
• a certain amount – about $20,000
• repayments – paying back money borrowed

Note: pronunciation of ‘debt’. The ‘b’ is silent.

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