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Following is a question by the Hon Cheung Man-kwong and an oral reply by the Secretary for Education and Manpower, Professor Arthur K C Li, in the Legislative Council today (November 16):
Question :
Regarding the Local Student Finance Scheme and the Financial Assistance Scheme for Post-secondary Students, will the Government inform this Council of the following over the past five years:
(1) whether it set upper limits and ratios for the grants, low-interest loans and non-meanstested
loans for each year; if so, of the reasons and the ratios; if not, how it addressed the situation
where the amounts of assistance and loans applied for exceeded the estimates;
(2) the annual numbers of cases of repayment of low-interest loans and non-means-tested loans,
the loan amounts and the amounts of interest arising from the loans involved; the respective
numbers of cases where the loans amounted to $100,000 or above, $200,000 or above, and
$300,000 or above made through low-interest loans or non-means-tested loans or both, and the
respective loan periods, and the average and highest loan amounts in each category; and
(3) how the study and living expenses of the applicants in the above schemes were calculated; the
average amount of subsidy for study and living expenses given to each student with a breakdown by academic level and discipline (e.g. arts, science and medicine), and details and timetable of the authorities' review of the above grant and loan schemes?
Reply :
Madam President,
(1) It is Government's policy to ensure that no students are deprived of education due to a lack of means. At present, the Student Financial Assistance Agency (SFAA) provides various financial assistance schemes for students at different levels on a non-cash-limiting basis.
Students enrolled on publicly-funded programmes are eligible for assistance under the Local
Student Finance Scheme (LSFS) and the Non-means-tested Loan Scheme (NLS), whereas
students enrolled on self-financing programmes are eligible for assistance under the Financial
Assistance Scheme for Post-secondary Students (FASP) and the Non-means-tested Loan Scheme
for Post-secondary Students (NLSPS). At present, we have not set any ceiling or ratio for
grants, means-tested loans and non-means-tested loans. SFAA will provide assistance to all
eligible students. If the total amounts of grants and loans payable exceed the approved
estimates, we will seek supplementary provisions from the Financial Services and Treasury
Bureau or the Finance Committee of the Legislative Council as appropriate.
(2) The interest rate applicable to loans under the LSFS is 2.5% per annum. In the 2004/05
academic year, there were 64 178 repayment accounts with a total repayment of about $660 million, of which about $620 million was for repayment of principal and about $34 million for interest payment.
The interest rate applicable to loans under the FASP is 2.5% per annum. In the 2004/05
academic year, there were 1 965 repayment accounts with a total repayment of about
$8.1 million, of which about $7.2 million was for repayment of principal and about $0.96 million
for interest payment.
The NLS and the NLSPS operate on a full-cost recovery basis. Interest is charged on a "no-gain-no-loss" basis, now at 6.275%. In the 2004/05 academic year, there were 15 843 repayment accounts under the NLS for students pursuing publicly-funded programmes, with a total repayment of about $200 million, of which about $160 million was for repayment of principal and about $44 million for interest payment. On the NLSPS for students pursuing self-financing programmes, there were 3429 repayment accounts with a total repayment of about $49 million, of which about $40 million was for repayment of principal and about $9 million for interest payment.
Breakdown of statistics for the various schemes in the relevant academic years is at Annex 1.
In the past five academic years, the number of loan borrowers under the four schemes with a total accumulated loan amount ranging from $100,000 to $199,999, from $200,000 to $299,999, and at $300,000 or above was 11,025,489 and six respectively. Breakdown of the relevant statistics for the various schemes is at Annex 2.
The loans and interests under the LSFS are to be repaid within five years while the loans and interests under the FASP, NLS and NLSPS are to be repaid within 10 years.
For borrowers under the four schemes whose total accumulated loan amount was at $100,000 or above, their average accumulated loan amount ranged from about $110,000 to about $149,000. The highest accumulated loan amount ranged from about $155,000 to about $308,000.
Breakdown of the relevant statistics for the various schemes is at Annex 3.
I wish to point out that it was not common for borrowers to take out large loans. Among
all borrowers, about 12% took out an accumulated loan of $100,000 or above, and only less than
0.6% had an accumulated loan of $200,000 or above. On average, a borrower took out an
accumulated loan of about $54,000. Taken on a monthly basis, the average amount of
repayment ranged from about $300 to about $1,000, depending on the schemes concerned.
We recognise that students may have difficulties in loan repayment. SFAA has put in place
an effective mechanism to handle such cases. Borrowers with financial difficulties may seek
assistance from SFAA. SFAA may, having regard to particular circumstances, approve their
applications for deferment of repayment, reduction in the quarterly repayment or extension of the
repayment period on a case-by-case basis. We encourage borrowers with financial difficulties to
approach SFAA for assistance.
(3) Based on the survey findings of the consultant engaged by SFAA, the Census and Statistics
Department has drawn up a set of students' academic expenses and living expenses items. The maximum amounts of assistance for payment of these expenses are updated annually, based on the movement of the Consumer Price Index (A) and the input provided by the relevant tertiary institutions.
In the 2005/06 academic year, the maximum grants for payment of students' academic expenses for the respective disciplines of undergraduate programmes under the LSFS range from $4,420 to $25,100 depending on the applicant's academic discipline. These grants are not applicable to the FASP. In the past five academic years, the average amounts of grants disbursed for academic expenses were $3,999, $3,950, $4,137, $4,266 and $4,362 respectively.
Regarding loans for living expenses, the maximum loan payable under all relevant schemes is capped at $33,850. In the past five academic years, the average amounts of loans disbursed for living expenses under all relevant schemes were $21,561, $21,350, $22,171, $22,648 and $23,059 respectively.
SFAA is conducting a review on the mechanism for adjusting the levels of grants and loans for academic and living expenses. We expect to complete the review in the coming year.
Ends/Wednesday, November 16, 2005
Issued at HKT 13:29
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