Home students in the UK, however, are not affected by the steep increase, since they are entitled to mandatory awards and will have their 'home' fee paid from public funds. Given that the JFS is designed to address the difference between the 'home' fee and the 'overseas' fee, the increase in the 'home' fee will have the effect of reducing the level of assistance to all eligible Hong Kong students. As available funding for grants has always been over-subscribed, the reduction in assistance will affect mostly the size of loans.
9
The financial impact upon the existing beneficiaries varies according to the size of their disposable income. careful examination of the general household circumstances shows that most of them live in public housing estates. Median household incomes do not exceed $8,000 per month. Median disposable
incomes do not exceed $8,000 per person per year.
About one third of the households have no disposable income at all. Applying existing rules and on the basis of the new 'home' fee, this least well-off group will have their assistance cut by £1,068 p.a. (£1,675 - £607). The rest will see their assistance reduced, on average, by about £800 p.a.
10
The use of the new 'home' fee for calculating assistance under the JFS will result in a reduction in loan commitment for HKG, as follows
-
Average loan (in f)
Year
using new 'home' fee
1990-91 1991-92
300 430
using existing 'home' fee
and adjusting by 5% p.a.
1,005 1,430
Loan commitment for HKG (in £ million)
using new 'home' fee
0.50 0.74
using existing 'home' fee
and adjusting by 5% p.a.
1.68 2.46
11
The FCO have suggested that we should avoid reducing financial assistance to Hong Kong students, by 'home' fee notionally at £607 for the purpose The Hong Kong Commissioner in London supports
the level of retaining the of the JFS. this proposal.
Proposals
Adoption of a notional 'home' fee
There are basically two options:
12
the
new
'home'
fee
of
£1,675
either for JFS to use p.a. in calculating
CONFIDENTIAL