research or survey. As a result of the change, grant requirements for 1974-75 were increased by some 44%, ironically as a result increase in the students' disposable income.
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:
Percentage of monthly earnings Existing loan repayments
Institution graduating from
Hong Kong University
Chinese University of Hong Kong
Hong Kong Polytechnic:
Higher Diploma
Diploma
6%
7%
7%
6%
Total assistance
8%
10%
9%
8%
119. By comparing the benchmark entry points for different academic qualifications, I have also arrived at rough estimates of the extra earning power a student gets from his tertiary education. There is for example a difference of six points on the Government master pay scale between the entry point of a university graduate and that of a matriculant. By comparing this extra earning power with the average amount of assistance received. I have established that even if all the assistance was to be repaid within the stipulated period of five years the monthly repayments would be less than the extra earnings received, indicating that the benefits the students get from their tertiary education would be sufficient to allow them to repay all the assistance they had received:
Institution graduating from
Hong Kong University
Chinese University of Hong Kong
Hong Kong Polytechnic:
Higher Diploma
Diploma
Percentage of extra earnings Existing loan repayments
Total assistance
20%
30%
27%
37%
42%
58%
13%
18%
The above findings suggest that repayments under an all loan scheme would not cause the majority of students serious problems or undue hardships. Thus the assumption made at the scheme's inception with regard to the students' ability to repay loan assistance which has never been subsequently examined would now seem to be invalid. This is further supported by the fact that over the years the amount of loan repayments that have had to be written off has been relatively low. I have therefore proposed to the Secretary, University and Polytechnic Grants Committee that a fresh review of the existing arrangements should be conducted to see if an all loan scheme could be introduced.
120. An all loan scheme would also reduce the financial consequences which result from inaccurate and mis-statement of information in applications for financial assistance, which was referred to in the Fourth Report of the Public Accounts Committee issued in December 1981. The Committee were alarmed at the high incidence of dishonesty then reported in the applications for financial assistance and considered the situation most unsatisfactory. The Committee went on to recommend that the application forms for assistance should require the production of supporting documentary evidence wherever appropriate, for example, tax returns, salary statements, receipts for rent paid, certificates of bank balances, and that in future the Secretary, University and Polytechnic Grants Committee should check such supporting evidence submitted together with the application forms.
23
No comments yet.
Private notes are available after approval.