Graduates who move overseas and fail to repay their student loans after their studies should be arrested, suggests an education expert who has authored a report on what the UK can learn from New Zealand’s higher education sector.
Sam Cannicott, former Regent’s University London employee who now works for Statistics New Zealand, described how New Zealand’s “no-nonsense approach” to collecting student loan repayments from graduates overseas highlights the “timidity of the steps taken in the UK.”
He said: “Former students who fail to make repayments face arrest at the New Zealand border, which is proving to be a strong deterrent.”
His comments have come on the day the Higher Education Policy Institute (Hepi) publishes a major comparative study, Higher Education in New Zealand: What might the UK learn?, which has highlighted how New Zealand’s total student loan debt sits at around £6.8 billion – just six per cent of GDP. The UK’s total student loan debt, however, is approximately £70 billion, 16 per cent of GDP.
Although the country’s higher education sector is considerably smaller than the UK’s, the report insists British universities must learn from New Zealand post-Brexit, a nation which consistently performs well in international league tables.
As well as tougher controls over student loan repayments, the report suggests that, like New Zealand, the UK must provide “a red carpet” to international students, and also move to protect quality when liberalising student number controls.
Cannicott explained how “breaking the link” between income and loan repayments for graduates who head overseas, as New Zealand has done, “removes bureaucratic barriers” that make it difficult to chase repayments. He continued: “Brexit presents an opportunity for the UK to learn from New Zealand because there is less need to ensure the repayment terms of EU students are the same as those for domestic students.
“The UK is missing a trick by concentrating international student recruitment at the tertiary level. By following the New Zealand model and opening up the school system to international pupils, the UK could develop a useful pipeline for higher education institutions.”
The report has come after a study from social mobility charity, the Sutton Trust, found England to have the highest level of debt per graduate than any other country in the English-speaking world. With England’s grads now leaving with almost £45,000 of student debt, New Zealand’s graduates leave with just £23,300, the lowest of any other anglophone nation.
Nick Hillman, director of Hepi, supported New Zealand’s tough action against those who avoid paying their loans, and said: “Tax evasion and benefit fraud rip taxpayers off. Defaulting on your student loan could be regarded as just as bad. Yet it is fairly common among both Brits and EU citizens who study in the UK before working abroad. Whitehall has never gripped this problem fully, but New Zealand’s experience suggests strong enforcement action works.
“If the Government is serious about wanting to sell off the student loan book to the private sector, tougher penalties for non-repayment would also increase its value. Given that the £9,000 fees regime is now maturing and postgraduate loans are being introduced, a new repayment regime for those living overseas should be a more urgent priority than ever before. Ministers, MPs, and peers should consider amending the Higher Education and Research Bill currently before Parliament to ensure higher repayment rates.”