Victor Fung Keung says we should name and
shame those who use the money to speculate
Officials at the Student Financial Assistance
Agency should feel
ashamed for proposing
unworkable solutions to clamp
down on student loan defaults. It’s
a no-brainer. The agency’s
suggestion to lengthen the
repayment period and lower
interest rates will help to increase
the number of defaults, not cut it.
Because the loan schemes are
non-means-tested, many
university students borrow the
money (which can be as much as
HK$400,000) to gamble in the
stock market or elsewhere. If they
make a killing, they repay the loan.
If they lose every cent, they simply
walk away. If push comes to shove,
they declare bankruptcy. They
seem pretty sure the government
can’t touch them.
The school year that ended in
August 2010 saw a 20 per cent rise
in loan defaults from a year earlier.
About 13,000 graduates failed to
repay loans totalling
HK$213 million, which, of course,
is taxpayers’ hard-earned money.
The relevant government
departments should shame these
irresponsible so-called elite of
Hong Kong by prosecuting each
one of them.
The student-loan agency
should also share the credit data of
these graduates with other credit
agencies so that all banks, and
perhaps their prospective
employers, would know how
selfish they are.
The agency’s current proposals
are a non-starter. They will only
worsen the situation. Indeed,
university students who plan to
speculate in the stock market with
the money would welcome the
news with glee that borrowing
rates will be cut to 1.674 per cent a
year from 3.174 per cent, and the
repayment period lengthened to 17
years (including a grace period of
two years), from 10.
Under the agency’s
misconceived suggestions,
taxpayers have to dole out another
HK$75 million a year.
Why should we subsidise those
immoral graduates who lose
money in speculation? Can anyone
reconcile the fact that Hong Kong’s
economy improved last year and
yet the number of student loan
defaults jumped by 20 per cent?
The rise in defaults underscores
the fact that moral education in
Hong Kong’s education system has
room for improvement.
It’s hardly news that a huge
number of university students sell
their rights to buy computers at a
discount to “professional traders”
to make a fast buck. The discount
scheme is offered to university
students at the beginning of an
academic year.
Naming and shaming the
defaulters is the only solution to
deter these irresponsible students.
They must be warned of the dire
consequence of not paying back
their loans. Deterrence is the only
weapon.
Victor Fung Keung, based in
Hong Kong, is a commentator on
education and political issues
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