Thousands of New Zealanders living overseas are facing bankruptcy because they are in denial about their mounting student loan debt, a tax specialist says.
The interest rate on student loans for New Zealanders living overseas is 5.3 percent, while the late payment interest rate is 9.3 percent.
Kristina Anderson, who works for an Auckland-based tax advisory firm, told the Sunday Morning programme many people are in denial about their debt.
She said some are too young and have no experience of financial responsibility when they first get a student loan.
"We have many people who contact us who, for example, might have had an original student loan debt of $20,000 and then they've received contact from the IRD out of the blue and now their debt is in the six figures."
She said one a client had a debt of $350,000 most of which was comprised of interest and penalties.
Ms Anderson said she believed there were 9000 individuals with serious debt problems.
