U.S. Reports $135 Million Recouped From Defaulters
The federal government said today that it has recovered more than $135 million from “hard-core” government loan defaulters, most of them holding student loans, by keeping their 1985 income tax refunds.
The pilot program, which used the Internal Revenue Service as a last resort to collect the debts, was a “bona fide government success story,” Budget Director James C. Miller III said.
“Government loans are predicated on the assumption that they will be repaid, just like a home mortgage, a car note, or any other type of loan. . . . The attitude on the part of some that such loans and benefits are in fact gifts, and never need to be repaid, is just plain wrong,” Miller said.
All told, the Internal Revenue Service withheld $135 million from tax refunds owed to 248,000 people, from about 605,000 delinquent accounts involving $1.3 billion in debts from five agencies.
Most of the so-called “offsets” came from the Education Department, $116 million; Veterans Administration, nearly $8 million; Small Business Administration, nearly $6 million; the Department of Housing and Urban Development, $5 million, and the Department of Agriculture, $1 million. The average was $544 per individual.
Miller projected that another $13 million will be collected by the end of the year.
In addition, 50,000 people voluntarily repaid their debts totaling $30 million to avoid a confrontation with the IRS.
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