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Public views invited on non-means-tested loan schemes

     The Government is inviting public views on improvements to the operation of the non-means-tested loan schemes administered by the Student Financial Assistance Agency (SFAA).

     A Government spokesman said today (March 15), "The review aims to introduce improvements to the operation of the loan schemes, to ensure that while reasonable financial support is provided for students pursuing post-secondary and continuing education, effective measures are in place to address public concerns on the loan default rate and proper use of public resources."

     The review, covering the scope, eligibility criteria, application procedures, interest rate, repayment arrangements, as well as measures to address the default situation, will be conducted in two phases.

     The Government is inviting public views during the first phase of the review, which lasts for three months from March 15 to June 15.  Views and suggestions from the public and stakeholders on the non-means-tested loan schemes are sought, in particular on the following five key issues:

(i)     restrictions, if any, on the amount and coverage of loans;

(ii)    introduction of additional criteria, if any, on the courses eligible under the schemes;

(iii)   changes, if any, to the existing interest rate arrangements;

(iv)    changes, if any, to the repayment terms and conditions; and

(v)     measures to reduce the default rate more effectively.

     "We would also welcome comments on other issues relating to the non-means-tested loan schemes," the spokesman said. "We will carefully consider the views from the public and stakeholders before drawing up recommendations for further consultation with the public during the second phase of the review."

     The non-means-tested loan scheme came into operation in the 1998/99 academic year to provide an alternative source of finance to tertiary students who did not wish or failed to go through the means test as required under the financial assistance scheme concerned.  Its ambit has been expanded over the years.  

     At present, the SFAA administers three non-means-tested loan schemes - one for full-time students pursuing publicly funded post-secondary programmes, one for full-time students pursuing self-financing locally accredited post-secondary programmes and one for students pursuing an extensive range of continuing education courses.  In the 2008/09 academic year, a total of about $995 million was disbursed by the three non-means-tested loan schemes to around 23,000 students.  There are now around 85,000 active non-means-tested loan repayment accounts.

     As at the end of the 2008/09 academic year, there were more than 13,000 defaulters under the three non-means-tested loan schemes.  The default rate was more than 15%. Of these defaulters, about 40% had defaulted for nine or more instalments (more than two years) and more than 25% had defaulted for 13 or more instalments (more than three years).  The amounts of arrears and undemanded loan principal in the defaulting accounts were $176 million and $465 million respectively.

     Details of the non-means-tested loan schemes are available on a dedicated website on the Education and Training Cluster of the GovHK portal ( and the website of the SFAA ( Members of the public and stakeholders are invited to send in their views on or before June 15 by:

Post: NLS Review Team, Non-means-tested Loan Scheme Section, Student Financial Assistance Agency, 12/F Cheung Sha Wan Government Offices, 303 Cheung Sha Wan Road, Kowloon

Fax: 2110 4716


Ends/Monday, March 15, 2010
Issued at HKT 16:53


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