National's proposed policy on lowering student loan rates may appeal to graduates in the country, but for those living overseas it makes repaying their debts tougher.
The policy outlines the Government's plan to keep graduates living in NZ by lowering repayment rates from 12 cents to 10c for every dollar earned over $24,128.
However, the proposed changes will not benefit working Kiwis who moved across the ditch.
Some Kiwis living across the ditch say higher wages and better opportunities mean the proposed penalties won't persuade them to move home. (Source: 1News)
Tougher penalties such as a 1% increase on rates and looser arrest thresholds for overseas loan holders could potentially impact everyday living.
Part of National's plan would be to implement rules that ensure Kiwis living abroad won't be able to access their KiwiSavers before paying off their student loans.
University of Auckland Business School Professor Robert MacCulloch told 1News that limiting KiwiSaver access is unfair and problematic.
"I think it is fundamentally an attack on kiwis who are living abroad.
"The KiwiSaver funds are your own money, they are not government money. When a government says 'we're going to sequester your own money for a particular purpose', that raises a lot of issues. As a general principle the Government's not allowed to do that," MacCulloch said.
Finance minister Nicola Willis said law changes might have to happen in order to carry out the proposed changes, assuring the Government would do so within reason.
Willis argued the penalties would be worth it, as according to National overseas borrowers make up 93% of student loan debts, with just three out of 10 meeting their annual repayment requirements.
Kiwi midwifery student Angel Maihi used to study in NZ and has $40,000 in student debt.
She now studies in Queensland and is concerned what the future will hold for her.
"It does worry me a little bit that the interest rate is increasing on the student loan and it makes me want to pay it off quite quickly," she said.
But increasing loan rates and restricting access to private funds aren't enough to convince graduates in Australia to return to NZ.
Maihi told 1News that the Government's pledge to crack down on people in her position hasn't convinced her to move home.
"Australia pays midwives quite a lot more here so one reason is wages.
"I am not a citizen here, so I don't get a student loan in Australia, and I pay my course fees up front and I still live week to week. It's just way easier to get ahead in the long run," Maihi said.
Another Kiwi, Natasha Smits, says moving her career back to New Zealand doesn't make financial sense.
"If I were to come home to New Zealand, I would take a $60,000 a year pay cut immediately," she told 1News.
For Kiwi students and graduates, the benefits of living across the ditch may continue to prove worthwhile, despite the National's proposed efforts against them.
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