Student loan defaults reach nearly $100m, education chief says

The default amount of five student financial assistance schemes had reached HK$97.3 million as of December 31 last year, according to Secretary for Education Choi Yuk-lin.

Default cases are classified as those with two or more consecutive overdue quarterly installments or six or more consecutive overdue monthly installments.

Among a total of 5,197 cases recorded, almost 54 percent are related to the Extended Non-means-tested Loan Scheme. The default rate in terms of total number of loan repayment accounts stands at 5.18 for the scheme -- which is the highest -- involving HK$43.3 million in overdue amounts.

Choi emphasized that the Student Finance Office (SFO) will take legal action to recover the overdue amounts when borrowers fail to respond or make repayments after repeated reminders.

Addtionally, she noted that the SFO will only consider writing off loans when the defaulted amounts are confirmed to be irrecoverable, including situations such as the borrower's death or when the individual's indemnifier is unable to repay the loan.

There were 40 write-off cases as of last year for the five student financial assistance schemes, totaling HK$2.54 million, while the Extended Non-means-tested Loan Scheme recorded the most cases, with a write-off amount of HK$910,000.