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Following is a question by the Hon Cheung Man-kwong and a written reply by the Secretary for Education, Mr Michael Suen, in the Legislative Council today (March 17):
Question:
In connection with the implementation of the Non-means-tested Loan Scheme ("NLS"), the Non-means-tested Loan Scheme for Post-secondary Students ("NLSPS") and the Extended Non-means-tested Loan Scheme ("ENLS"), will the Government inform this Council:
(a) of the respective numbers of applications received and approved under each of the aforesaid loan schemes in each of the academic years from 2005-2006 to 2009-2010, together with a breakdown of the figures for ENLS by the categories of students as set out in the Eligibility section of the Guidance Notes for ENLS;
(b) of the largest, smallest, median and average loan amounts approved under each of the aforesaid loan schemes in each of the academic years from 2005-2006 to 2009-2010, as well as the respective programmes involved;
(c) of the number of defaulters and default rate of each of the aforesaid loan schemes in the 2009-2010 academic year;
(d) of the reasons for setting a maximum loan amount for NLS;
(e) of the reasons for not setting maximum loan amounts on tuition fees for NLSPS and ENLS; and if it will review whether or not such maximum loan amounts should be set; if it will, of the details and the timetable; if not, the reasons for that;
(f) whether it will review afresh the practice of setting the interest rate on the basis of the risk-adjusted factor of the various loan schemes; if it will, of the details and the timetable; if not, the reasons for that;
(g) which of the programmes covered under the various loan schemes are not subject to the regulation of any relevant legislation or the assessment of the Hong Kong Council for Accreditation of Academic and Vocational Qualifications;
(h) of the annual number of programmes for which applications were submitted to the Controller of the Student Financial Assistance Agency ("SFAA") for inclusion into the Register of Eligible Course Providers and Courses between 2005-2006 and 2009-2010 academic years, the respective numbers of such programmes for which approval had been and had not been given, as well as the relevant assessment criteria; and the number of programmes being removed from the Register in each of the past five school years; and
(i) of the measures put in place by the authorities to guarantee the quality of the programmes approved by SFAA and to ensure that such programmes will not be discontinued?
Reply:
President,
The Government's student finance policy is to ensure that no student would be denied access to education due to lack of means. The non-means-tested loan scheme was first introduced in 1998/99 academic year to provide an alternative source of finance to those tertiary students who failed to or did not wish to go through the means test as required under the financial assistance scheme concerned. Its ambit has been expanded over the years with the approval of the Finance Committee of the Legislative Council. At present, the Student Financial Assistance Agency (SFAA) is administering the following three non-means-tested loan schemes which aim at providing loans to eligible students to pursue their studies:
* Non-means-tested Loan Scheme (Scheme A) - applicable to full-time students covered by the Tertiary Student Finance Scheme - Publicly-funded Programmes (TSFS), i.e. students pursuing publicly-funded post-secondary programmes offered by the University Grants Committee (UGC)-funded institutions, Hong Kong Institute of Vocational Education of the Vocational Training Council, Prince Philip Dental Hospital and Hong Kong Academy for Performing Arts.
* Non-means-tested Loan Scheme for Post-secondary Students (Scheme B) - applicable to full-time students covered by the Financial Assistance Scheme for Post-secondary Students (FASP), i.e. students aged 25 or below and pursuing self-financing locally-accredited post-secondary (degree, top-up degree and sub-degree level) programmes.
* Extended Non-means-tested Loan Scheme (Scheme C) - applicable to students not covered by TSFS and FASP and who are pursuing part-time and continuing education programmes.
My replies to the questions in seriatim are in the ensuing paragraphs:
(a) The number of applications received and approved under the three non-means-tested loan schemes from 2005/06 to 2009/10 academic years are at Annex I.
(b) The highest, lowest, median and average loan amounts under the three non-means-tested loan schemes from 2005/06 to 2009/10 academic years and the programmes involved are at Annex II.
(c) The number of defaulters and default rate under the three non-means-tested loan schemes in the 2009/10 academic year are at Annex III.
(d) and (e) At present, the maximum loan amount receivable by a loan borrower under the three non-means-tested loan schemes in an academic year is as follows:
Maximum loan amount receivable
in an academic year
Scheme A Tuition fees payable in the academic year
(the highest tuition fees payable for
eligible courses under the Scheme in
2009/10 academic year is $42,100)
Scheme B Tuition fees payable in the academic year
(no ceiling) + living expenses
($36,880 for 2009/10 academic year) +
academic expenses ($3,200 for
2009/10 academic year)
Scheme C Total tuition fees payable in
the academic year (no ceiling)
Since the eligible courses covered by Scheme A and Scheme B are full-time courses, a student can only apply for loans in respect of one eligible course under Scheme A or Scheme B in an academic year. For Scheme C which covers a wide range of continuing education courses, a student may apply for loans for more than one eligible course under Scheme C in an academic year. Where practicable, a student may apply for loans under more than one of the three loan schemes for pursuing different eligible courses in an academic year.
In addition, there is no limit on the total amount of loans that may be borrowed by a person under different loan schemes at any one time. There are also no limits on the total number of courses for which loans may be borrowed and the total amount of loans that may be borrowed by a student under any one scheme across academic years.
Eligible courses under Scheme B and Scheme C are self-financing programmes. Tuition fees of these courses are determined by the relevant institutions having regard to the market situation. To ensure that no student would be denied access to education due to lack of means and to encourage life-long learning, Scheme B and Scheme C do not set a ceiling on tuition fees loan so that sufficient loans would be provided to eligible students to meet their tuition fees.
The Government will conduct a review on the operation of the non-means-tested loan schemes, which would study whether there should be any changes to the restrictions on the loan amount, loan coverage (whether the loans should cover tuition fees only, or should also cover academic expenses and living expenses) and number of courses for which loans may be applied by each student. We have just launched phase 1 of the review on the operation of the non-means-tested loan schemes on March 15, 2010, which will last for three months. The Government has provided the public with key information and issues of concern on the non-means-tested loan schemes for the purpose of inviting public views. We would carefully consider the views and suggestions received from the public with a view to drawing up proposals on how best to improve the schemes.
(f) Borrowers of non-means-tested loans do not need to go through any means test, and the loans are not secured. To ensure the proper use of public money, the non-means-tested loan schemes operate on a no-gain-no-loss and full cost-recovery basis. The current interest rate of non-means-tested loans includes a 1.5% risk-adjusted factor (RAF) that seeks to cover Government's risk in disbursing unsecured loans.
In view of the different default situations of the three non-means-tested loan schemes, we have accepted the recommendation made by the Director of Audit in his Report No.53 published in November 2009 to consider the feasibility of adopting different rates of RAF for the three loan schemes based on their different risk levels, in the context of the review on the operation of the non-means-tested loan schemes.
(g) The eligible courses under Scheme A are full-time publicly-funded post-secondary programmes offered by the eight UGC-funded institutions, Hong Kong Institute of Vocational Education of the Vocational Training Council, Prince Philip Dental Hospital and Hong Kong Academy for Performing Arts; those under Scheme B are full-time self-financing locally-accredited post-secondary programmes. These programmes are provided by institutions with self-accrediting status or have been accredited by the Hong Kong Council for Accreditation of Academic and Vocational Qualifications.
Scheme C covers a wide range of courses, including programmes offered by the Open University of Hong Kong and Hong Kong Shue Yan University, Project Yi Jin programmes, publicly-funded part-time programmes offered by publicly-funded institutions and their Schools of Professional and Continuing Education, courses offered by statutory bodies, registered and exempted courses under the Non-local Higher and Professional Education (Regulation) Ordinance (Chapter 493), programmes offered by a school registered or exempted from registration under the Education Ordinance (Chapter 279), programmes offered by a post secondary college registered under the Post Secondary Colleges Ordinance (Chapter 320) and other programmes approved by the Controller, Student Financial Assistance Agency (SFAA). Eligible courses under Scheme C are not required to be locally-accredited or reimbursable courses of the Continuing Education Fund.
(h) The Controller, SFAA, in exercise of the authority delegated by the Finance Committee of the Legislative Council, approves inclusion of other institutions and courses under Scheme C on the basis of the following approved criteria:
Approval of Institutions
The institution offering the course must fall under one of the following categories:
(a) A registered trade, professional, business association or Chamber of Commerce.
(b) An educational agency having affiliation with a Consulate or a foreign government (e.g. Alliance Francaise, British Council, etc).
(c) A company incorporated under the Companies Ordinance (Chapter 32) that has at least three years of experience in providing training.
Approval of Courses
The course being offered must be:
(a) A course undertaken to gain or maintain qualifications for use in any employment;
(b) A course that takes not less than one month to complete; and
(c) A course that will lead to an award of qualification or certificate of attendance.
From 2005/06 to 2009/10 academic years, the number of courses approved and removed by the Controller, SFAA are at Annex IV.
(i) When processing applications for inclusion under Scheme C put up by other institutions and courses, staff of SFAA will visit the relevant institution's premises, make enquiry on the operation of the course concerned and its basic information, such as the course fee and duration etc. If the institution and course concerned are found to meet the criteria mentioned in (h) above, the Controller, SFAA will approve the inclusion of such institution and course under Scheme C. The approval criteria make no reference to the quality of the institution concerned, nor that of the course offered by the institution.
According to the existing mechanism for processing loan applications under Scheme C, SFAA will normally examine whether the applicant fulfils the eligibility criteria and whether the course pursued is an eligible course. The quality of the eligible training institution/body concerned and the course offered is not an approving criterion. Notwithstanding this, SFAA and the Education Bureau will conduct surprise inspections to some eligible training institutions/bodies under Scheme C to authenticate the course information or the loan borrowers' attendance records.
In the course of reviewing the operation of the non-means-tested loan schemes, we would study whether there should be additional eligibility criteria for courses covered by the schemes, such as whether we should introduce academic accreditation or other forms of quality assurance as an eligibility criterion as appropriate.
Ends/Wednesday, March 17, 2010
Issued at HKT 18:06
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