The government lent the family the money to pay for repairs on the Aggie Grey's hotel in the wake of Cyclone Evan in 2012.
The Aggie Grey's hotel and bungalows in Apia were sold to Chinese investors in September last year.
But the Samoa Observer reported the new owners have become embroiled in the government loan.
Finance Minister Sili Epa Tuioti said the government is negotiating with the new owners on the payments.
Some has been paid already by the Grey family.
