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Following is a question by the Hon Leung Yiu-chung and a written reply by the Secretary for Education, Mr Eddie Ng Hak-kim, in the Legislative Council today (December 11):
Question:
Quite a number of students studying locally-accredited self-financing post-secondary programmes have relayed to me that the tuition fees of such programmes have been rising incessantly in recent years, rendering it necessary for them to take out substantial amounts of loans from the Student Financial Assistance Agency (SFAA). They are worried about the heavy burden of loan repayments in future. In this connection, will the Government inform this Council:
(a) whether it knows the respective (i) total number of places and (ii) average amount of tuition fees of the aforesaid programmes in each of the past five academic years, with a breakdown by programme type (i.e. full-time associate degree, higher diploma and undergraduate programmes, etc.) (set out in tables of the same format as Table 1);
(b) of the numbers of students of the aforesaid programmes who applied for loans under SFAA and the total amounts of loans applied for in each of the past five academic years, with a breakdown by programme type (set out in tables of the same format as Table 2);
(c) of the total amount of loans granted by SFAA to students of the aforesaid programmes, the total amount of interest received annually under such loans and the uses of such interest, since 2008; and
(d) whether it knows the adjustment mechanism for tuition fees of the aforesaid programmes; whether measures are in place to ensure the level of tuition fees not exceeding the repayment ability of those students in future; if so, of the details; if not, the reasons for that?
Reply:
President,
(a) The number of new intakes and the annual tuition fees charged for full-time locally-accredited self-financing sub-degree (including associate degree and higher diploma) and degree programmes between the 2008/09 and 2012/13 academic years are tabulated at Annex 3.
(b) Students pursuing full-time locally-accredited self-financing sub-degree (including associate degree and higher diploma) and degree programmes may apply for grant and loan under the Financial Assistance Scheme for Post-secondary Students (FASP). Those who pass the means test are eligible for a grant to cover tuition fees and academic expenses as well as a low-interest loan to cover living expenses. As for those who do not wish or fail to go through the means test, they may apply for a loan under the Non-means-tested Loan Scheme for Post-secondary Students (NLSPS) to cover their tuition fees. The number of students pursuing full-time locally-accredited self-financing sub-degree (including associate degree and higher diploma) and degree programmes who applied for means-tested and non-means-tested loans, the number of students receiving loan and the loan amount disbursed between the 2008/09 and 2012/13 academic years are tabulated at Annex 4.
To alleviate the repayment burden of student loan borrowers, the Government completed the review on the operation of means-tested and non-means-tested loan schemes in 2012 and implemented the improvement measures of lowering the interest rate and extending the repayment period. For means-tested loans, the interest rate has been reduced from 2.5% to 1% per annum and the standard repayment period has been extended from five years to 15 years. For non-means-tested loans, the risk-adjusted-factor rate has been reduced from 1.5% to 0% (subject to review three years after implementation). The prevailing interest rate is 1.395% per annum, and the standard repayment period has also been extended from ten years to 15 years. Regarding the repayment amount, based on the median means-tested loan of $40,000 borrowed by students of full-time locally-accredited self-financing programmes who graduated in 2012, after lowering the interest rate and extending the repayment period, the monthly repayment amount has been significantly reduced by 66% from $711 to $240. With regard to the median non-means-tested loan of $87,000 borrowed by graduates of the same programmes in the same year, after lowering the interest rate and extending the repayment period, the monthly repayment amount has been reduced by nearly 40% from $897 to $557.
(c) The amounts of means-tested and non-means-tested loans disbursed to students pursuing full-time locally-accredited self-financing sub-degree (including associate degree and higher diploma) and degree programmes and the interest received each year between the 2008/09 and 2012/13 academic years are tabulated at Annex 5.
Means-tested and non-means-tested loans are financed by the Loan Fund of the Government of the Hong Kong Special Administrative Region. According to the Memorandum Note of the Loan Fund, the interest income of such loans should be credited to the Loan Fund to finance part of the new loans.
(d) Post-secondary institutions in Hong Kong enjoy a high degree of autonomy in academic development and administration. Overall, when setting the tuition fee levels for self-financing programmes, institutions plan on the basis of a balanced budget and adopt a prudent approach, taking into account a basket of factors, including expected enrolment, similar programmes available in the market, and affordability of the target group.
For students with financial difficulties, the Government has set up various assistance schemes to ensure that no students are denied access to post-secondary education due to a lack of means. As mentioned in Part (b) of this reply, students with financial difficulties may apply for grant and/or low-interest loan to cover tuition fees, academic expenses and living expenses under the means-tested FASP. Alternatively, they may apply for a loan under the NLSPS to cover tuition fees.
Ends/Wednesday, December 11, 2013
Issued at HKT 13:31
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