Graduates living overseas will not be out of pocket after an Inland Revenue Department (IRD) botch-up meant some were asked to pay off more of their student loans than necessary, the department said today.
Reports on the website studenz.co.nz showed the IRD had demanded some student loan holders living overseas pay
an incorrectly calculated repayment amount.
Overseas graduates are asked to pay one-fifteenth of their student loan balances each year. But some have been asked to pay one-fifteenth of old student loan balances, which are much higher, leading to overpayments.
Today, Inland Revenue admitted the mistake but said no students would end up overpaying their loan balance.
"Inland Revenue has identified that some student loan borrowers have had their non-resident assessment calculated using an incorrect loan balance," IRD general manager of business development Colin MacDonald said in a statement.
"Currently the department is making system changes so all future non-resident assessments will be calculated using the correct loan balance. It is important to point out that no borrower will be out of pocket and they will not pay more for their student loan."
Mr MacDonald said only around 1000 graduates were affected.
"Many of the affected cases have been over-assessed by relatively small amounts, for example less than $100. Of the affected cases analysed to date, the assessments have been inflated by an average of approximately 10 per cent."
At least 17,000 student-loan holders live overseas. They owe an average more than $16,400 each.
- NZPA and HERALD STAFF
