The federal government has announced it will write off 44,000 loans this year, meaning taxpayers are set to pick up the tab on $540 million in unpaid student loans.
“Amounts being written off are debts for which all reasonable efforts to collect the amounts owed have been exhausted,” read a statement from the Treasury Board.
The Canada Revenue Agency attempts to collect unpaid loans by sending notices and withholding income tax refunds, and in some circumstances they may also garnish wages or seize assets. The Crown, however, loses legal authority to collect these debts after a six-year limitation period.
The department has stated that approximately 87 per cent of all student loans are repaid within this limitation period.
With files from Canada.com
