IRD scoops up $32m in student loan debt
The Inland Revenue Department (IRD) has clawed back $32 million of overseas student loan debt in less than two years.
The department is also on the brink of ramping up its debt collection efforts. Borrowers living overseas have collective loans of $2.67 billion, of which $411.5m is overdue.
In October 2010, the IRD began a small-scale project to chase overseas debtors, which had returned over $32m to July 31.
“This amount is money we otherwise would not have collected if we didn't have the campaign in place,” IRD collections manager Richard Owen said. The initiative used a mix of direct contact and debt collection and tracking through private collection agencies to focus on 1000 Australian-based borrowers.
Every dollar spent on the pilot scheme has returned $11.40 of taxpayers' money.
In the next 2 years, the IRD will extend the campaign to about 57,000 other borrowers, with the focus mainly on Australia and the United Kingdom.
The IRD would shortly put out a formal tender for the services of private debt collection and tracing agencies.
Revenue Minister Peter Dunne said the scheme had received “extremely strong” support from the public. “People have obligations and you can't just shirk your obligations by leaving the country.”
Everyone needed to play ball, and it was unfair that overseas borrowers took three to four times longer to repay their debt, he said.
- © Fairfax NZ News