the level of assistance; or to adopt a notional 'home' fee which is based on the existing level of £607 p.a. and suitably adjusted for inflation annually.
13
The students
well-off families.
were
assisted under JFS do not come from They would suffer further hardship if we to adopt the first option and allow the level of assistance to be reduced. They have nowhere else to go for a university education in an English speaking country, because a similar education in North America or Australia would be considerably more expensive. There are no places for them in Hong Kong to return to, given that we now provide only one degree place for every three matriculants. These circumstances will remain unchanged until 1994-95, when we could provide three degree places for every four matriculants. Moreover, having regard to the strong parental pressure that led to the establishment of the JFS, a reduction in the level of financial assistance would meet with strong resistance.
14
We therefore
propose adopting a notional 'home' fee for the purpose of calculating assistance under the JFS. We further propose that the notional 'home' fee should also be adjusted for inflation at 5% annually. On this basis, the notional 'home' fee for 1990-91 would be £637 p.a.
Charging interest on loans
15
under the JFS p.a. is being
Under current practice, loans provided bear no interest, whereas interest at 2.5% charged on loans given under the Local Student Finance Scheme (LSFS) which provides financial assistance for students studying in local tertiary institutions.
There is no compelling reason for maintaining differential treatment between the two Schemes. We therefore propose that interest at 2.5% p.a. be charged on all loans given under the JFS.
16
As shown in the table at the Annex, the average loan received by students in 1990-91 is expected to be £1,005 or HK$12,560 (based on
an assumed exchange rate of £1 = HK$12.50 which is the rate adopted for 1990-91 estimates). Assuming a student receives the same amount of loan per year during his three-year study period, his total loan would be HK$37,680. Charging interest at 2.5% p.a. would result in an increase in his monthly repayment of about HK$40. We consider that an increase of this magnitude is unlikely to cause hardship to graduates in employment.
FINANCIAL IMPLICATIONS
17
The adoption of a notional 'home' calculating assistance under the JFS increased expenditure over and above what
fee for the purpose of will not result in any is now incurred.
No comments yet.
Private notes are available after approval.