Canada’s auditor general is calling for the federal government to step up its recovery of outstanding student loans to keep taxpayers from being left on the hook.
In a report tabled in Parliament this morning, the auditor says $2.4 billion in outstanding students loans were in default last year, most of which will likely not be recovered.
The auditor blames a combination of factors, including a failure to assess whether those asking for loan relief actually qualify and a failure to inform borrowers of their financial obligations.
The auditor also says 87 per cent of recent borrowers were not making repayments on $2.9 billion in loans as the government has made it easier to access loan relief.
The Canada Revenue Agency was found to have its hands tied in recovering outstanding loans, in part because it did not have the same powers as when it comes to recovering unpaid income tax.
The auditor says the government needs to take a tougher stance by better assessing whether borrowers should be given relief and using other measures such as notifying credit bureaus of loans in default to encourage more repayment.
The Canadian Press