The UK and Australian governments are working on a data sharing pact. This will be to locate expatriate graduates who have defaulted student loans in the two countries.
The agreement will recoup more of the 457 million pounds (AU$928 million) of the UK student loan book. Many non-paying or unverified borrowers are holding this money and most of them are settled overseas. There are too many British students, who consider Australia as a popular destination for education. Australia is now home to the largest amount of outstanding student debt.
The ministers from both countries are finalizing the data sharing details. In the trial phase, each country shared data on 200 borrowers. They had not been making regular repayments and the status was unknown. The data helped in locating 90 percent of non-responding borrowers. It worked well. One fifth of them started making repayments as soon as they received a letter, reports Times Higher Education.
Many European Union countries will be joining hands with Australia in this initiative. Meanwhile, student loan companies are taking the service of international debt collection services and tracing agencies. Borrowers in the UK and overseas would be facing penalties, default notice on credit history and litigation. Jo Johnson, the universities minister of UK said student loan repayment system must be fair and efficient.
“We will take stronger action to trace borrowers including those overseas, act to recover loan repayments where it is clear that borrowers are seeking to avoid repayment, consider the use of sanctions against borrowers who breach loan repayment terms and, if necessary, prosecute,” he said.
Meanwhile, new compliance measures will target Australians living abroad with defaulted student loans. The government’s mid-year economic review urged more steps on that front. It has been estimated that $800 million is due from Aussie graduates overseas. Data-matching by the Australian Taxation Office will fast track their identification, reports The Australian Times.