Tertiary Education Report: Information on student loan borrowers with overdue repayments, and overdue repayment penalties

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1 12 This document has been released under the Official Information Act 1982 (the Act). Some information has been withheld under section (18)(c)(i) disclosure would be contrary to provisions of a specified enactment. These sections are marked as 5. Some information has been withheld under section (6)(c) disclosure would prejudice the maintenance of the law. These sections are marked as 6. You have the right under sections 19 and 28(3) of the Act to ask an Ombudsman to review this decision 25 February 2011 ED37/19/07/20 Tertiary Education Report: Information on student loan borrowers with overdue repayments, and overdue repayment penalties Executive summary This report provides information to supplement the report Further advice Restricting student loans for those with overdue repayments (Metis ). The Minister for Tertiary Education has asked for further information on: borrowers with overdue repayments, student loan borrowers who have overdue repayments split by $500 or more, $1,000 or more and $2,500 or more the hardship relief provisions for those with overdue repayments the length of overdue repayments the income of those with overdue repayments. This report should be read in conjunction with the earlier report. Analysis shows that as at 1 January 2010, the largest number of student loan repayment defaults are less than one year old. The highest proportion of those with overdue repayments who receive hardship relief is in the year old age group. For borrowers with overdue repayments in 2009, at all thresholds ($500, $1,000 and $2,500): in the and age groups, there were higher proportions of borrowers in arrears compared to other age groups there were higher proportions of Māori and Pasifika in arrears in all age groups compared to other ethnicities. wānanga and private training establishments had higher proportions of borrowers who have overdue repayments study below bachelors level has the highest proportions of borrowers in arrears. Information on overdue loan repayment penalties has also been included in this report.

2 Recommended actions We recommend that the Minister for Tertiary Education and the Minister of Revenue: a. note that this report provides further information on student loan borrowers with overdue repayments, as requested by the Minister for Tertiary Education b. note that this report is provided to assist you with making a decision in regard to the report Further advice Restricting student loans for those with overdue repayments (Metis ). Dr. Andrea Schöllmann Group Manager, Tertiary Education Ministry of Education Hon Steven Joyce Minister for Tertiary Education / / Hon Peter Dunne Minister of Revenue / / 2

3 Tertiary Education Report: Information on student loan borrowers with overdue repayments and overdue repayment penalties Purpose of report 1. On 18 February 2011, we provided you with further advice on restricting student loans for those with overdue repayments (Metis ). The Minister for Tertiary Education requested further information on: student loan borrowers who have overdue repayments (split by $500 or more, $1,000 or more, and $2,500 or more); hardship relief for borrowers in default; how long borrowers are in default; and income information for those in default. This paper should be read in conjunction with the earlier paper. 2. The Minister for Tertiary Education has also previously requested information on penalties charged on overdue repayments of student loans this information is also included in this report. Background 3. We have previously advised you on options to restrict student loans for borrowers who have overdue student loan repayment obligations. The aim of such a policy is to signal that repayment obligations need to be met, that there are consequences for non-compliance, and to reduce non-repayment. It is also expected to improve repayments from non-compliant overseas-based borrowers that return to New Zealand to study. The policy objective is to focus on deliberate non-compliance, rather than on those who cannot meet their repayment obligations due to their financial situation. 4. The policy would likely have a disproportionate impact on key target groups, such as Māori, Pasifika and beneficiaries. Although hardship provisions may reduce this impact, it would come at an increased ongoing administration cost. New Zealand-based borrowers with overdue repayment obligations The overdue repayment process 5. New Zealand-based borrowers who have underpaid their loan obligations for the previous tax year receive a letter around August informing them that they have underpaid their obligations and have a final repayment due on 7 February. A reminder letter is sent to all borrowers with a 7 February obligation in November, with risk-based calling and texting during December, January and early February If borrowers fail to pay by 7 February the underpayment is considered overdue. Borrowers are advised within 30 days by letter that they have gone into default and that penalties are being charged on the unpaid overdue amount. Until the default amount is paid the borrowers are sent monthly statements for the amount overdue and contact is made on a prioritised basis. 7. Some reasons why people may have an underpayment, which may result in a default, include: Intentional non-repayment. 1 Timing is dependent on type of customer PAYE or IR3, and whether they are required to file a PTS/IR3 and the time that they file. 3

4 People or employers not using the correct student loan tax code. Errors in deduction calculations. Non-wage sources of income, or other income not taxed at source. Did not meet repayment obligations while overseas. 8. Table 1 shows New Zealand-based defaulters and the age of their default as at January The largest numbers of defaulters have been in default for less than one year. Some older default amounts are due to overseas-based borrowers returning to New Zealand that had been in default while overseas. 9. However, being in default does not necessarily mean the default amount is not being managed (for example, the defaulter may have an instalment arrangement with Inland Revenue). Table 1: Age of default for New Zealand-based borrowers as at January 2011 Age of Default (years) Defaulters Less than 1 14, , , , ,988 5 to 9 4, or more 150 Total 41,005 Source: Inland Revenue 10. To minimise the amount of people getting into default, in October 2008 Inland Revenue introduced an automated programme that checks borrowers are on the right tax code, informing both the borrower and employer if it is incorrect. This has so far been very successful with over 95% of borrowers being on the correct tax code within four months of the letter being sent. Collecting overdue repayments 11. Inland Revenue capitalises (adds back to the loan balance) overdue amounts of $333 or less, because this is deemed uneconomic to collect. [5] [6] Hardship relief 12. Inland Revenue can grant hardship relief to student loan borrowers, as per section 54 of the Student Loan Scheme Act. Borrowers may apply for hardship relief for: any tax year prior to the current tax year; the current tax year; or the next tax year. 13. To consider a person's ability to meet their Student Loan repayment obligation, and whether they qualify for relief from payment, Inland Revenue requires full financial details. This includes: a. the amount in tax arrears b. weekly income after tax c. partner/spouse s weekly income after tax d. weekly expenses (e.g. food, rent, petrol, childcare) 4

5 e. monthly payments (e.g., utility bills) f. yearly payments (e.g. rates, insurance, vehicle registration) g. assets and liabilities (e.g. property, bank accounts, mortgages, credit cards) h. proposed amount to repay. 14. [5] [6] 15. Hardship relief for student loans is different than for other tax types, where the debt is written off. For student loans the penalties are reversed and the overdue portion of the loan is capitalised (added back to the loan balance). 16. The greatest proportion of hardship relief is requested from those between the ages of Table 2: Hardship requests from Age Female Male Total Less than % 0.2% 0.2% % 30.1% 28.8% % 41.8% 40.4% % 19.2% 20.9% % 6.9% 8.0% Greater than % 1.8% 1.8% Total 100.0% 100.0% 100.0% Source: Inland Revenue Changes with the introduction of the pay period based system 17. With the introduction of the new pay period based system, IR3 taxpayers will be treated no differently from the current process. Borrowers with solely PAYE income, and who are not full-time students who have applied for an exemption, will be assessed each pay period and will have student loan repayments deduced accordingly. If a significant (definition of significant is still to be confirmed) underor over-deduction occurs, the borrower and employer will be contacted and the amount that should have been deducted will be collected, or refund arranged (if requested by the borrower). 18. For small under- and over-deductions, Inland Revenue will be focusing on ensuring the right deduction is made going forward rather than collecting the back amount no default will be created for these small under deductions. This is expected to significantly reduce the number of borrowers who have underpayments due on 7 February, and therefore will reduce the amount of new default created when borrowers fail to pay. Analysis of New Zealand-based borrowers with overdue repayments 19. The following analysis looks at people who borrowed from the loan scheme in 2009 and were in arrears on their student loan repayments. It includes age, ethnicity, income, subsector and level of study. Future work could explore further income analysis, including salary and wage earners vs. IR3 taxpayers, and those who return from overseas this would require two or three days work for an analyst at the expense of other Budget work. 20. The data is for three thresholds: $500 or more, $1,000 or more, and $2,500 or more. The two options presented in previous reports was $500 or more, and $2,500 or more ($2,500 is the average amount for repayments overdue). 5

6 21. The data does not take into account possible behavioural changes that may result with the introduction of the proposed policies, such as people repaying the amount in default so they can borrow again. The data does not identify how many people would be eligible for hardship relief. All counts have been randomly rounded to base 3, and totals may not add due to rounding. Age and Ethnicity 22. The three tables below show the number of people who were in default by each of the three thresholds. There were around 4,800 people with outstanding repayments of $500 or more, 3,300 with $1,000 or more, and 1,500 with $2,500 or more. 23. Raising the threshold decreases the number and proportions of people the policy would potentially impact. However, the patterns are similar for each threshold: The and age groups have higher proportions of borrowers in default in, compared to other age groups. Higher proportions of Māori and Pasifika are in default in all age groups compared to other ethnicities. Table 3: Age of borrowers with $500 or more in default European Māori Pasifika Asian All < 20 0% (3) 0% (3) 0% (3) 0% (3) % (336) 2% (201) 2% (96) 0% (45) 1% (336) % (438) 9% (429) 11% (225) 2% (72) 4% (438) % (297) 14% (459) 13% (180) 2% (36) 5% (297) % (189) 13% (348) 13% (132) 2% (21) 4% (189) % (96) 12% (237) 10% (84) 1% (15) 3% (96) % (93) 11% (171) 11% (60) 2% (18) 3% (93) % (42) 11% (105) 11% (27) 1% (6) 3% (42) % (21) 9% (45) 7% (9) ) 3% (21) % (6) 6% (12) 2% (6) 65+ 2% (3) 6% (9) ) 2% (3) Total 2% (1524) 6% (2013) 5% (819) 1% (222) 3% (4773) Note: Dash indicates a value of 0, 1 or 2 Table 4: Age of borrowers with $1,000 or more in default European Māori Pasifika Asian All < % (159) 1% (105) 1% (51) 0% (24) 1% (357) % (291) 6% (282) 9% (177) 1% (51) 4% (843) % (213) 10% (330) 11% (144) 1% (24) 6% (738) % (132) 9% (249) 11% (111) 1% (18) 5% (534) % (66) 9% (183) 9% (72) 1% (15) 4% (348) % (57) 8% (132) 9% (54) 2% (12) 4% (267) % (24) 8% (81) 10% (24) 1% (6) 4% (138) % (12) 7% (33) 5% (6) 3% (51) % (6) 4% (9) 1% (15) 65+ 2% (3) 4% (6) 0% (3) 1% (12) Total 1% (963) 4% (1410) 4% (639) 1% (153) 2% (3303) Note: Dash indicates a value of 0, 1 or 2 6

7 Table 5: Age of borrowers with $2,500 or more in default European Māori Pasifika Asian All < % (36) 0% (27) 0% (9) 0% (6) 0% (81) % (99) 3% (114) 4% (81) 0% (18) 1% (324) % (105) 5% (150) 6% (81) 1% (12) 3% (360) % (72) 5% (126) 7% (72) 1% (12) 3% (294) % (33) 5% (90) 5% (36) 1% (9) 2% (174) % (27) 5% (69) 6% (30) 0% (3) 2% (135) % (15) 4% (42) 3% (6) 0% (3) 2% (69) % (9) 4% (18) 5% (6) 2% (33) % (3) 2% (3) 1% (6) 65+ 2% (3) 2% (3) 1% (6) Total 0% (399) 2% (645) 2% (321) 0% (60) 1% (1479) Note: Dash indicates a value of 0, 1 or 2 Income of borrowers in default 24. Of those who studied in 2009, and had overdue amounts exceeding $500, 59% studied the year before (i.e. in 2008). 97 percent of this group (those who studied in both years) had income over $1000 in the tax year ending 31 March % had incomes over the student loan repayment threshold. This suggests many were part time students at least in Of those students who did not study in the previous year (i.e. 41%), 95% had taxable income over $1000 and 62% had income over the repayment threshold. 26. Table 6 shows percentiles of income in among those who did not study in 2008 and had income over $1000 in the year. Table 6: Incomes in of borrowers in default in 2009 who did not study in 2008 Percentile p5 p10 p25 p50 p75 p90 p95 Income $5,640 $9,840 $16,260 $23,760 $34,300 $44,870 $51,860 Subsector and Ethnicity 27. The three tables below show the number (and proportion) of borrowers in each subsector who are in default by each of the three thresholds. All ethnicities have lower proportions in arrears at universities, compared to other subsectors. This is most pronounced for Māori and Pasifika. Table 7: Subsector and ethnicity of borrowers with $500 or more in default European Māori Pasifika Asian All University 1% (654) 3% (342) 3% (216) 1% (141) 1% (1464) Polytechnic 2% (573) 6% (657) 6% (246) 1% (51) 3% (1590) Wānanga 5% (18) 10% (399) 7% (21) 0% (3) 8% (444) PTE 2% (282) 7% (615) 7% (333) 1% (24) 4% (1275) Table 8: Subsector and ethnicity of borrowers with $1,000 or more in default European Māori Pasifika Asian All University 1% (411) 2% (249) 3% (162) 0% (96) 1% (993) Polytechnic 1% (366) 4% (441) 5% (204) 1% (33) 2% (1089) Wānanga 4% (15) 8% (297) 7% (21) 0% (3) 6% (336) PTE 1% (177) 5% (426) 5% (255) 1% (18) 3% (891) 7

8 Table 9: Subsector and ethnicity of borrowers with $2,500 or more in default European Māori Pasifika Asian All University 0% (162) 1% (111) 1% (90) 0% (39) 0% (438) Polytechnic 1% (156) 2% (192) 2% (105) 0% (15) 1% (489) Wānanga 2% (6) 4% (147) 2% (6) 0% (3) 3% (165) PTE 1% (75) 2% (195) 2% (123) 0% (3) 1% (399) 28. Figure 1 shows the number of borrowers in each subsector who are in default for the three thresholds. Figure 2 shows the proportion of borrowers in each subsector who are in default. Although universities and polytechnics have the greatest number of students in arrears for each of the three thresholds, wānanga and PTEs have higher proportions of students in default, meaning the policy is likely to have the greatest proportional impact on borrowers at wānanga and PTEs. Figure 1: Number of borrowers in each subsector in default $500+ $1,000+ $2, Universit y Polyt echnic Wānanga PTE Figure 2: Proportion of borrowers in each subsector in default 9% 8% 7% 6% 5% 4% 3% $500+ $1,000+ $2,500+ 2% 1% 0% Universit y Polyt echnic Wānanga PTE All Level of study 29. The three tables below show the proportion (and number) of borrowers at each level of study who are in default. There are higher proportions of borrowers in default below bachelors level. 8

9 Table 10: Level of study and ethnicity of borrowers with $500 or more in default European Māori Pasifika Asian Total Level 1-3 Certificates 3% (225) 6% (570) 5% (168) 0% (12) 4% (993) Level 4 Certificates 2% (144) 7% (417) 6% (180) 1% (12) 4% (768) Diplomas 2% (342) 8% (429) 7% (189) 1% (33) 4% (1023) Bachelors 1% (678) 4% (504) 4% (246) 1% (114) 2% (1644) Honours/Postgrad cert/dip 1% (69) 5% (51) 5% (21) 1% (18) 1% (171) Masters 2% (48) 6% (36) 7% (15) 2% (27) 3% (141) Doctorates 2% (15) 4% (6) 6% (3) 1% (3) 2% (30) Table 11: Level of study and ethnicity of borrowers with $1,000 or more in default European Māori Pasifika Asian Total Level 1-3 Certificates 2% (135) 5% (414) 4% (129) 0% (9) 3% (702) Level 4 Certificates 1% (96) 5% (273) 5% (150) 1% (9) 3% (540) Diplomas 2% (228) 6% (300) 5% (144) 1% (24) 3% (717) Bachelors 1% (429) 3% (357) 3% (189) 0% (69) 1% (1113) Honours/Postgrad cert/dip 1% (39) 4% (36) 3% (12) 0% (12) 1% (108) Masters 1% (30) 5% (30) 6% (12) 2% (21) 2% (105) Doctorates 1% (12) 4% (6) 6% (3) 1% (3) 2% (30) Table 12: Level of study and ethnicity of borrowers with $2,500 or more in default European Māori Pasifika Asian Total Level 1-3 Certificates 1% (57) 2% (192) 1% (45) 0% (6) 1% (303) Level 4 Certificates 1% (48) 2% (135) 2% (69) 0% (3) 1% (261) Diplomas 1% (93) 2% (129) 3% (84) 0% (6) 1% (324) Bachelors 0% (162) 1% (162) 2% (105) 0% (30) 0% (483) Honours/Postgrad cert/dip 0% (18) 1% (9) 3% (12) 0% (3) 0% (45) Masters 1% (15) 3% (18) 4% (9) 1% (12) 1% (63) Doctorates 0% (3) 2% (3) 0% (0) 0% (0) 1% (9) 9

10 Level 1-3 Certificates Level 4 Certificates Diplomas Bachelors Honours/Postgrad cert/dip Masters Doctorates All Level 1-3 Certificates Level 4 Certificates Diplomas Bachelors Honours/Postgrad cert/dip Masters Doctorates 30. Figure 3 shows the number of borrowers in default at each level, and figure 4 gives the proportion of borrowers at each level who are in default. Bachelors level has the highest number of borrowers in default, however, the greatest proportion of those in default at each level is at diploma and certificate levels 1-4 as can be seen in figure 4. Figure 3: Number of borrowers in each level of study in default $500+ $1,000+ $2, Figure 4: Proportion of borrowers in each level of study in default 5% 4% 4% 3% 3% 2% 2% $500+ $1,000+ $2,500+ 1% 1% 0% 10

11 Overdue repayment penalties (New Zealand- and overseas- based borrowers) What are overdue repayment penalties? 31. New Zealand-based borrowers, either working or studying, are required to start repaying their loans once their annual income exceeds a certain level. For the 1 April 2010 to 31 March 2011 tax year, the annual income threshold is $19,084. Borrowers who receive a salary or wage over the threshold will have their repayments automatically deducted straight out of their pay. Borrowers who are self-employed or earn other income are required to make repayments by the end of the tax year. 32. Overseas-based borrowers repayments are based on the size of their loan balance, not their income. They are entitled to a repayment holiday of up to three years during which they are not required to make any repayment. Once the repayment holiday is reached, they are required to make two equal instalments (on 30 September and 31 March) each year. Interest is charged on student loans during the repayment holiday. 33. If a repayment is not paid in full by the due date, a penalty of 1.5% per month on the amount overdue is charged to the loan account until the total amount is repaid. This penalty compounds to an annual rate of 19.5% and would double the overdue loan account balance every four years. The change in the Student Loan Scheme Bill 34. In the Student Loan Scheme Bill recently introduced to the House, the late payment penalty rules will be replaced by a less punitive late payment interest rate from 1 April Borrowers who do not meet their loan repayment obligations will be subject to a late payment interest on the total unpaid amount at the base interest rate plus a penalty margin of 4% each year. Based on the current base interest rate of 6.6%, this gives a late payment interest rate of 10.6%. The penalty margin will be lowered to 2% for borrowers who make contact with the Inland Revenue Department and enter into instalment arrangements to pay off any defaulted amounts, giving a total interest rate of 8.6%. 36. The change is intended to reduce the rate at which student loan debt grows, which will hopefully make it easier for some borrowers to pay overdue amounts and keep up-to-date with current repayment obligations. The changes will align student loan penalty rules with those that apply to income tax debt. 37. Any borrower having difficulty repaying an overdue student loan debt is able to negotiate an arrangement for repayment. Borrowers are able to negotiate a lower repayment obligation, including to zero, if repayment would cause serious hardship. In certain circumstances, a borrower may have the original overdue amount (exclusive of any penalties) added back to the loan principal. The purpose of overdue repayment penalties 38. The purpose of overdue repayment penalties is to encourage borrowers to make repayments on time, or prompt borrowers to repay outstanding debts quickly. The rate of overdue repayment penalties, therefore, is often set quite high to achieve this purpose. The student loan regime in Australia treats 11

12 overdue repayments of student loans the same way as overdue tax, to which a penalty rate of 11.74% applies At 1.5% per month, it is still argued that the penalties are doing the opposite of encouraging repayments. Outstanding debt can still escalate quickly to a point where the amount becomes more difficult to repay. In that case, the debts may remain unpaid or hardship relief may be provided. 40. For overseas-based borrowers in particular, a large, growing debt might deter some borrowers from returning back to New Zealand and reduce the chance of their outstanding debts ever being repaid. Overdue repayments and penalties in the Student Loan Scheme 41. Overdue repayments account for around 3% of the total loan balance. As at 30 June 2010, the total amount of overdue repayments for all borrowers was $325 million, up from $306 million in the previous year. The growth was partly due to overseas-based borrowers who have been away from New Zealand for more than five years and are not meeting their repayment obligations and incurring penalties. Overseas-based borrowers overall represent 14.5% of all borrowers but they are responsible for 56% of total overdue repayments Around $102 million of penalties was charged to default borrowers as at 30 June % of which came from overseas-based borrowers and 60% from New Zealand-based borrowers. The percentage of penalties is lower for overseas-based borrowers due to the impact of the amnesty 4 and three-year repayment holiday. 27,000 borrowers will reach the end of their repayment holiday in the 2011 tax year, and for the first time in three years have a repayment due on 31 March Inland Revenue is forecasting a significant increase in default and penalty levels in 2011 as, based on the interim repayments that were due in September 2010, only a small percentage of overseas-based borrowers fully met their September repayment obligation. 43. Most borrowers in default only had a small amount of penalties. As at 30 June 2010, there were around 85,000 borrowers with penalties (New Zealand-based and overseas-based) 67% of them had penalties of $1,000 or under, 31% had penalties between $1,001 and $10,000, and 1.3% had penalties over $10,001 (Table 1 in the appendix refers). 44. Other notable characteristics of borrowers with overdue repayment penalties are: Most default borrowers (75%) were in the 20- to 40-year-old age group. Default borrowers in the older age groups on average had higher amounts of penalties (possibly because their loans have been in default longer) (Table 2 in the appendix). 2 General Interest Charge (GIC) rate for the October - December 2010 quarter. The rate is pegged to the 90 day Bank Accepted Bill rate and is reviewed every quarter. 3 Overseas-based borrowers have a higher risk of falling behind on repayment obligations. Their loan balances increase more quickly due to the interest added to their loans. Many of them either do not inform the Inland Revenue Department (IR) when and where they go overseas, or do not maintain contact with IR during and after their three-year repayment holiday. 4 Any overdue repayment penalties on student loans were reversed on 31 March Instead, default borrowers are required to pay an amnesty amount of 5% of their loan balances owing on 31 March 2008 (or all the overdue repayment penalties on 31 March 2008, whichever is smaller). 12

13 The median amount of penalties owed by New Zealand-based borrowers was $231, compared to $790 for overseas-based borrowers. Females accounted for 48% of default borrowers, but only 39% of total penalties (Table 3 in the appendix). The longer the loans have been in default, the larger the penalties. As at 30 June 2010, there were 152 loans which had been in default for over 10 years. The total amount of penalties for these loans was $2.5 million (Table 4 in the appendix). There were a small number of default borrowers (39) with penalties over $50,000. These borrowers had a total of $3.0 million of penalties, and $3.5 million of overdue repayments (Table 5 in the appendix). 70% of overseas-based borrowers in default had been overseas for six years or more and they accounted for 81% of the total overdue repayments for overseas-based borrowers (Table 6 in the appendix). Having said that, there were a number of default borrowers (206) in the six years or under group with over $15,000 of overdue repayments. Many of these people would have been in default before they left New Zealand. 45. Officials are working on extracting data on default borrowers who were granted hardship relief for their repayment obligations in the past few years. We will report back to you on it within the next couple of weeks in the paper about restricting student loans for those in arrears. The impact on the Student Loan Scheme 46. As a result of the decision to lower the overdue repayment penalty, we expect the overdue repayments to increase at a lower rate 5 and a positive behavioural change from the borrowers to repay their loans. The exact impact of the change is difficult to quantify at this stage. A shift in repayment behaviours would depend on a wide range of factors such as job opportunities, income levels, economic cycles, as well as the student loan policies on interest rate, repayment holiday, voluntary repayment bonus and penalties amnesty. 5 Overdue loan account balance would double in around 7 years, instead of 4 years. 13

14 Appendix 1. The following data is for all borrowers, New Zealand- and overseas- based. Table 1: Range of penalties Range of penalties Number of defaulters Total penalties Percentage Cumulative percentage $0.01 to $500 37,585 $ 5,917, % 44.3% $501 to $ ,045 $ 15,029, % 68.0% $1001 to $1500 5,333 $ 6,469, % 74.2% $1501 to $2000 8,119 $ 13,505, % 83.8% $2001 to $2500 6,377 $ 14,848, % 91.3% $2501 to $3000 1,286 $ 3,525, % 92.8% $3001 to $3500 1,010 $ 3,270, % 94.0% $3501 to $ $ 2,933, % 95.0% $4001 to $ $ 2,555, % 95.7% $4501 to $ $ 2,244, % 96.2% $5001 to $ $ 4,182, % 97.1% $6001 to $ $ 3,431, % 97.8% $7001 to $ $ 2,998, % 98.2% $8001 to $ $ 2,817, % 98.6% $9001 to $ $ 2,022, % 98.9% $10001 to $ $ 1,859, % 99.1% $11001 to $ $ 1,335, % 99.2% $12001 to $ $ 1,276, % 99.3% $13001 to $ $ 1,281, % 99.5% $14001 to $ $ 940, % 99.5% > $ $ 11,323, % 100.0% Total 84,810 6 $ 103,771, % Table 2: Defaulters by age Age of defaulters (years) Number of defaulters Total Penalties up to $ 51,928 >20yr 30 32,327 $ 20,658,995 >30yr 40 37,052 $ 53,642,674 >40yr 50 15,468 $ 20,813,614 >50yr 60 5,375 $ 7,126,728 >60 1,416 $ 1,477,305 Total 92,469 $ 103,771,245 6 There were 92,469 borrowers in default as at 30 June ,659 of these borrowers have penalties equalled to zero. 14

15 Table 3: Defaulters (male vs. female) Number of defaulters Total Penalties Female 44,178 $ 40,502,844 Male 48,198 $ 63,158,352 Undetermined 93 $ 110,048 Table 4: Defaulters by age of default Number of Age of default (years) defaulters Total Penalties Under 1 27,658 $ 4,004,500 >1yr 5 60,459 $ 72,835,621 >5yr 10 4,200 $ 24,368,159 > $ 2,562,965 Total 92,469 $ 103,771,245 Table 5: Defaulters with penalties over $50,000 Number of defaulters Total Penalties Penalties >$50, $ 2,925,841 Table 6: Overseas defaulters Away under 6 years Away over 6 years Range of default Number of defaulters Total amount of default Number of defaulters Total amount of default $0.01 to $ $ 201, $ 37,531 $501 to $1, $ 861, $ 193,505 $1,001 to $1, $ 1,862, $ 551,383 $1,501 to $2, $ 1,149, $ 674,664 $2,001 to $2, $ 4,439, $ 2,147,225 $2,501 to $3, $ 905, $ 831,523 $3,001 to $3, $ 2,746, $ 2,119,723 $3,501 to $4, $ 744, $ 30,299,724 $4,001 to $4, $ 763, $ 231,501 $4,501 to $5, $ 3,553, $ 4,286,271 $5,001 to $6, $ 1,576, $ 1,157,903 $6,001 to $7, $ 5,206, $ 9,967,183 $7,001 to $8, $ 809, $ 31,005,180 $8,001 to $9, $ 752, $ 4,103,538 $9,001 to $10, $ 553, $ 8,854,481 $10,001 to $11, $ 575, $ 849,873 $11,001 to $12, $ 712, $ 50,661,992 $12,001 to $13, $ 584,559 2 $ 24,901 $13,001 to $14, $ 365,661 0 $ - $14,001 to $15, $ 348,578 1 $ 14,612 Greater than $15, $ 5,756,446 1 $ 17,506 Total 10,440 $ 34,470,513 24,051 $ 148,030,218 15