Hong Kong student loan scheme isn't working says Ombudsman

Hong Kong student loan scheme isn't working says Ombudsman

The government's student loan scheme can be abused by applicants, the Ombudsman, Connie Lau Yin-hing, said. Lau highlighted 13,000 default cases recorded over the past three years, resulting in HK$200 million in unpaid debts.

More than half of the unpaid debts came from the extended non-means-tested loan scheme, which offers loans at lower-than-market rates - mostly for people to enrol in part-time courses.

Speaking at a media briefing on Tuesday, Lau called on her office to submit negative credit data of the more serious defaulters to credit reference agencies to deter potential non-payers.

"These people [applicants for the extended scheme] have the ability to repay the loans but they choose not to," Lau said. "Maybe one of the reasons [is that] there is not enough [of a] deterrent effect."

The Ombudsman suggested other improvements to the system, including establishing a limit on the number of courses and loan applications students can file, and a stricter vetting procedure and computerised vetting to speed up the application process.

The Education Bureau said it welcomed the Ombudsman's report, but education sector lawmaker Ip Kin-yuen said the proposal had "serious implications" for indebted students, because the current education system had failed many recent graduates by forcing them to enrol in non-subsidised tertiary programmes.

This article appeared in the Young Post print edition as
Student loan scheme isn't working

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