IRD Pushes For Greater Student Loan Compliance
March 22, 2012 New Zealand Taxation
>The IRD is set to increase its efforts to boost the repayment of student loans held by borrowers now living overseas, and to encourage more people to make voluntary repayments.
Recent research released by the Inland Revenue Department shows that as at the start of the year, the cumulative balance of all student loans held by borrowers who are now overseas is at NZD 2.5 billion, with nearly NZD 312 million of further payments currently in arrears.
According to the the Department, efforts will be carried out throughout this year to increase the compliance rates amongst student loan holders who are based overseas. As part of its push, the IRD will contact borrowers directly or through their nominated contact person to remind them of their repayment obligations. The Department will also continue its advertising campaign aimed at reaching student loan holders through popular online social networks.
Borrowers who have not been granted a repayment holiday will be required to make a repayment on March 31st 2012. However, the IRD noted that even individuals who are not obliged to make payments will still see interest rate of 6.6 percent charged on their loan, and are encouraged to make repayments regardless. Under current regulations, borrowers who are not eligible for a repayment holiday are required to make two repayments per year, with a repayment amount based on their own outstanding student loan balance.
The IRD estimates that in 2011 its efforts to increase compliance directly led to an extra NZD 12 million of student loan repayments amongst borrowers living in Australia.
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