Volume 93, Issue 64

Tuesday, January 25, 2000


NEWS

Toronto teacher in court with bribery charge

Gentlemen, start your engines

TA negotiations resume in Toronto

Government withholds refunds from students

Government reserves funding for hockey

Theft highlights slow crime week

Briefs

Stuff

Caught on campus

Government withholds refunds from students



By Nina Chiarelli
Gazette Staff

To settle a backlog of outstanding student debt, the Alberta Department of Treasury announced it will start seizing the income tax returns of people with student loan debts which date back to the 1980s.

The department announced last week it would withhold the income tax refunds of 10,140 people who have defaulted on their student loans over the years. The total amounts to approximately $21.4 million in outstanding loan payments, said Tim Seefeldt, spokesperson for the Alberta Treasury.

"The majority [of the outstanding student loans] are from about 10 years ago. These are loans that aren't paid that we would have tried to collect," he said.

"This does not affect current students," he added, explaining the Alberta Treasury has the jurisdiction to allow Revenue Canada to seize any crown debt under federal income tax laws.

Under the income tax law, any province has this right, Seefeldt said. British Columbia, Nova Scotia and Ontario already use this provision to collect crown debt owed to them, but they do not use the provision for student loan delinquency.

Seefeldt also said everyone in jeopardy of losing their income tax refund has been notified by mail.

Students currently enrolled in post-secondary schools in Alberta would not be affected because in 1993, Seefeldt said, the province changed the way it distributed student loans.

That year, the province and banking institutions negotiated an agreement which made banks responsible for collecting student loan debt, instead of the province. "We want to clean up the backlog," he said.

Gordon Turtle, a communications officer in Alberta Premier Ralph Klein's office, confirmed that seizing delinquent payments was a Treasury department decision which the Premier fully advocates. "The Premier supports getting money from taxpayers that's owed to the government."

Despite Klein's support of the initiative, Linden Simmons, VP-academic for the Students' Union at the University of Lethbridge, said he was displeased with the Treasury's announcement, even though current students would most likely not be affected. "Before 1993, if you missed one payment, you went into default," he said. "Using income tax money is seedy."

Rahim Jaffer, reform Member of Parliament in Edmonton-Strathcona said he too was disappointed when he heard of the Alberta Treasury's new plan.

"Personal responsibility is one thing the Reform party stands behind. But the thrust of it is, I don't think this is going to make it easier or help the situation. Obviously this is a problem because someone is on the hook for this money, but most students I remember who took out student loans had the intention of paying them back," Jaffer said.

"There must be another way instead of taking their tax returns and confiscating whatever little extra money they have."


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Copyright The Gazette 2000