An Inland Revenue system fix last weekend has rectified an error that affected more than 150,000 student loan borrowers.
Inland Revenue said in 2020, as part of its business transformation project, student loan accounts were moved into a new system.
“Thiswas extremely complex and with complexity errors can arise.”
Last year, Inland Revenue found an error with the student loan interest calculation for some student loan accounts, which resulted in borrowers being overcharged or undercharged interest. The error was worth $15 million.
“Student loan interest calculations are complex, and some of the underlying causes relate to before the system upgrades were made through our business transformation.
“It took some time for us to establish the causes, establish fixes and test them. We also needed to do some manual work in preparation for making a system fix. Implementing the system fix required a system outage and to limit the impact the outage needed to take place on a weekend that is not on [or close to] a significant tax filing date.
“Inland Revenue successfully implemented a system fix over the weekend of December 6 and 7, 2025. We are confident that the system fix we have implemented has resolved this system error,” a spokesperson said.
About 23,000 people who had paid off their loans had been given a refund, an average of $10.50.
Another 64,500 still paying off their student loans received a credit, of an average $10.
About 23,000 borrowers received refunds, while 64,500 got credits due to the interest miscalculation. Photo / 123rf
About 67,000 people had interest added and then written off. IRD said most had less than $20 written off.
IRD said it had notified the affected borrowers.
“Customers will not receive an unexpected bill due to this error. Inland Revenue has written off the undercharged interest that was applied to affected customers’ accounts. Customers have been credited overcharged interest or refunded if the loan has been repaid.
“The total amount written off due to this error is approximately $15 million, which is less than 0.1% of all student loan balances.”
One affected borrower said she had been told she owed $276.61 for loan interest that was incorrectly calculated during her time overseas.
She refused to pay while she asked for more information, during which time IRD contacted her employer to deduct from her pay directly.
When she filed an Official Information Act request to find out more about what had happened, she was told the balance had been reduced to zero.
She was then told the problem had been resolved and she was getting a $1.31 refund.
Inland Revenue said it was not always possible to fix problems immediately.
“Some errors take time to be discovered and appropriate fixes to be worked through. When we do find an error, or someone alerts us to something that is not working as intended, we work as quickly as we can to understand what the error is and fix it. Every year, we update our systems and processes multiple times to make improvements. While very few errors come from these updates, occasionally there are some.”
