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The following is issued on behalf of the Student Financial Assistance Agency:
To relieve the financial burden of borrowers in repaying their student loans, the Government will extend the application period for the relief measure on deferment of student loan repayment for one year until July 31, 2012. Individual borrowers who have repayment difficulties may be granted up to a maximum of two years' interest-free extension on the loan repayment period.
The spokesman for the Student Financial Assistance Agency (SFAA) today (July 29) said that SFAA has an established mechanism under which individual borrowers who are unable to repay their loans on the grounds of financial hardship, pursuing further studies or serious illness may apply to SFAA for deferment of student loan repayment. SFAA will, on the basis of the merit of individual cases, approve applications for deferment of loan repayment. While interest is not charged on means-tested loans during the approved deferment period, interest will be accrued during the approved deferment period for non-means-tested loans, as the non-means-tested loan schemes operate on a no-gain-no-loss and full-cost-recovery basis.
In response to the economic downturn, the Financial Secretary announced in May 2009 the implementation of a relief measure to allow student loan borrowers whose deferment applications have been approved to defer repayment of their loan without interest being charged during the approved deferment period subject to a maximum of two years. The entire loan repayment period can also be extended for a maximum of two years. The application period for this relief measure is due to expire on July 31, 2011.
"To alleviate the financial burden of student loan borrowers who encounter repayment difficulties, in particular those who will graduate and enter the employment market this summer, the Government will extend the application period of the relief measure for one year until July 31, 2012," the spokesman said.
This relief measure is applicable to both means-tested and non-means-tested loan schemes administered by SFAA. Details are available at SFAA's website (www.sfaa.gov.hk).
The spokesman said that borrowers who complete their studies this summer would need to start repaying their loans. SFAA will issue letters of commencement of loan repayment/repayment schedules and demand notes to them. All borrowers have to repay their loans according to the repayment schedule.
The spokesman said that if borrowers do not receive the letter of commencement of loan repayment/repayment schedule and demand note by the end of this year, they should notify SFAA immediately to avoid late repayment of loans and being charged overdue interest/surcharge due to late payment. Borrowers who have repayment difficulties may apply to SFAA for deferment of loan repayment.
The spokesman said that while conducting a system clearance exercise in the past year, SFAA discovered that due to a system error in the activation of repayment of student loan accounts in one of the student financial assistance systems, they had not issued letters of commencement of loan repayment and demand notes in a timely manner to 92 borrowers who had completed their studies (involving 99 loan accounts) for loan repayment.
"These borrowers have not approached SFAA for loan repayment, and the incident also involved frontline staff failing to spot and rectify the error in a timely manner. We have immediately made contact with the borrowers concerned to arrange commencement of loan repayment. The majority of these borrowers have started repayment or have repaid their loans in full. We are now contacting the remaining 22 borrowers to discuss the repayment arrangements," the spokesman said.
The spokesman also appealed to borrowers to contact SFAA immediately if they do not receive the letter of commencement of loan repayment or demand notes after completion or cessation of studies. SFAA has initiated a thorough review of the system concerned and related administrative procedures and implemented improvement measures to prevent the recurrence of similar incidents.
Ends/Friday, July 29, 2011
Issued at HKT 16:50
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