IRD fails to communicate student loan interest rate changes to Kiwis living abroad

New Zealanders living abroad say they have been blindsided by the Inland Revenue Department’s (IRD) latest change to the interest rate on student loans.

On April 1, 2026, the interest rate for overseas student loan borrowers increased from 4.9 per cent to 5.6 per cent

London-based Kiwi Liv Kerr says she only noticed this change when she actively went and looked at her student loan assessment.

“I understand that it’s agreed in our loans that they can adjust interest rates… but the IRD has a duty of care to inform people when they change interest rates, just like they would with any other loan.”

An IRD spokesperson told TWN that it communicates changes to interest rates through its online platform myIR.

Kerr says this isn’t enough.

“They [the IRD] send you lots of emails when they want you to pay things… so why aren’t they having that same direct communication when they’re increasing interest rates?

“I think an automated email would be easy enough for them to do. Even if it isn't, it should be a requirement… we deserve to be directly informed when changes are made”.

When asked if the IRD believed its communication was sufficient or if it faced any challenges reaching Kiwis living overseas, the IRD spokesperson did not provide an answer.

Latest figures from the IRD suggest as of December 31 2025, only 31 per cent of student loan borrowers living overseas met their repayment obligations.

This is compared to 95 per cent of New Zealand based borrowers.

Student Loan Lawyer Dave Ananth says such high levels of disengagement should indicate to the Government that changes need to be made to the student loan scheme.

“They shouldn’t be looking at student loans as a commercial loan, but more of a social transaction.”

Kerr says “there are so many overseas New Zealanders who are disengaged with paying their loan back because it's out of control and has become a constant source of anxiety.”

Ananth says that although the law allows for the interest rate to be adjusted each year, it doesn’t make it sensible.

“I think there should be a reasonably fixed interest rate for students who go overseas… we shouldn’t be arbitrarily raising the interest rate.

“I get calls from people all over the world… loans that started as $20,000 or $30,000 now at $150,000.”

He says the country is missing out on the return of skilled and educated New Zealanders, out of their fear of being arrested at the border.