117.
Five years later, in 1979, further increases in students' disposable income and a fall in the level of grants, again prompted the Joint Universities Committee (and the Polytechnic Committee) to ask for more grants for the students. The Finance Committee of the Legislative Council was asked to approve a further split of the disposable income into a 50:50 ratio by two phases, to be completed in the academic year 1980-81. In putting up the proposal, the only reason given was that it would result in higher grants and lower loans than under the existing formula. The question of loan repayment was not mentioned. This change again brought about an increase of some 50% in the grant requirements for 1980-81 over what they would otherwise have been. In both instances, the attention of the Administration was apparently focused on the reduced level of grants that the students were receiving as a result of the rise in disposable income, rather than on the increased ability to repay that the students would possess on graduation. As a result of these two changes the scheme was made more generous in terms of the amount of grants given. Taking the academic year 1984-85 as an example, I have estimated that of the $32 million in grants paid out in that year, some $10 million was the result of the splitting of the disposable income.
118.
In the light of the lack of reviews conducted by the Administration, I have carried out my own research to see if an all loan scheme would be feasible. I have been assisted in this regard by the publication in May 1982 of the Report No. 8 of the Hong Kong Standing Commission on Civil Service Salaries and Conditions of Service, which provides benchmark entry points for various academic qualifications. According to the report, the Commission
has taken account of the starting pay and other pay practices in the private sector, in particular the rate of pay progression in the early years of employment, before setting the benchmarks. The benchmarks should therefore reflect not only public sector pay levels but also pay levels in the private sector. By comparing these benchmark entry points with the average amount of assistance received by the students graduating in 1985 I have arrived at the proportion the loan repayments would bear to the initial monthly salaries appropriate to the various academic qualifications. The results indicated that even if all the assistance was to be repaid over the normal five-year repayment period, the monthly repayment would on average be less than 10% of the graduates' initial monthly earnings, as the following table shows: