Auditors lash out at student loans body

State auditors have launched a stinging critique of student loans body CSN and the Swedish Social Insurance Agency (Försäkringskassan) for their failure to chase up debts owed by people living abroad.

In a report due to be presented to the government on Tuesday, the Swedish National Audit Office (Riksrevisionen) argues that the two agencies are costing the state billions of kronor in lost revenue.

Nine out of ten of the Social Insurance Agency’s creditors living abroad failed to meet their repayment requirement last year, Dagens Nyheter reports.

In the case of CSN, one out of every four clients living outside of Sweden missed payments in 2008.

In the coming year, grants and loans amounting 1.3 billion kronor ($167 million) will be written off by CSN as bad debts.

The Social Insurance Agency is set to write off 13 million kronor worth of debts in 2009, rising to 46 million kronor over the next five years.

“The Social Insurance Agency sends a collection letter. If there is no reply, then that’s the end of the matter. It’s fair to say that there’s very little risk involved in receiving payouts that are too high if you live abroad,” auditor Karin Lindell, the author of the report, told Dagens Nyheter.

She is also deeply critical of the agency’s inability to provide a list of people who have been overpaid.

“If you send money abroad you have to know where it’s being sent, otherwise it seems like you’re just sending it out willy nilly,” said Lindell.

CSN has submitted proposals over the last few days for improving its routines, a move welcomed by Lindell, although she is keenly aware that the body waited until it had “a knife to its throat”.

“Among other things, they want to be able to demand the full loan sum from people who are not making their repayments,” she said.


Students to keep paying off debt beyond 67

The Swedish government has proposed scrapping the 25-year span for repaying student loans, by suggesting those who attend higher education should keep paying the money back well into retirement.

Students to keep paying off debt beyond 67

At present some 200,000 students have their student loan written off every year when they reach the age of 67. However, proposals in the government's spring government bill are set to increase the financial burden on students. 

Along with the idea of extending the debt into old age, the government are going to more than double the fee when students get a late payment reminder.

It is presently 250 kronor ($38) but will go up to 450 kronor if the reform is passed. The move follows hot on the heels of a government u-turn to cut student grant by 300 kronor a month.

Finance minister Anders Borg has justified the moves by saying that all reforms must be paid for krona by krona.

The Swedish National Union of Students (Sveriges förenade studentkårer) criticized the government proposals, arguing that the level of debt already continues to increase.

"We are strongly opposed to this debt and collection politics which is obviously a strategy to pay for higher education. The past few years the debt burden has increased every year," chairman Erik Arroy told the TT news agency. 

He added; "It's fair that you repay your loans. However, we don't find it reasonable that you are expected to put yourself in debt as much as they assume people will do today." 
Meanwhile the Swedish student grant agency (CSN) said the proposed reform will mean they are dealing with a new, older, range of people in the future. 
"We will have a new group to work with and it's pensioners," Boel Magnusson of CSN told TT. 
She added that the full impact on CSN will not be known until an analysis on the proposal has been carried out. 
The Local/pr