If you're late on your mortgage payment, you risk losing your flat. Default on your bank loan and scary collectors pay you a visit. But if you're a university graduate and bail on your student loan, you get letters in the mailbox. If you move, the government administrator may lose track of you and you'll no longer get bothersome mail.
The government has been excessively lenient in collecting student loans given by the Student Financial Assistance Agency. Up to the past academic year, about 13,000 students had failed to repay loans totalling HK$213 million. This sends a bad message to the young: be irresponsible; don't pay back money you owe.
Now officials want to take action by transferring a student defaulter's credit history to a credit reference agency. But the proposal has generated howls of protest from the usual suspects.
Privacy Commissioner Allan Chiang Yam-wang has warned that the move could open a floodgate of similar demands by other government departments to recover overdue taxes, government rent, rates and water charges. At a Legislative Council education panel meeting, many lawmakers raised similar concerns.
But a credit history is different from most other personal data. Such data usually concern the individual alone, and we deserve extensive, if not absolute, control over how they might be used by others. But data like credit histories and criminal records have to do with people's dealings with others and society at large. This is why interested parties such as employers may check, under restricted conditions, whether a person has a criminal record.
A society with no credit records would allow dishonest borrowers a free ride on those with good credit. Borrowing costs would rise.
In principle, student loans are no different from other loans. Young people need to learn to be financially responsible - and live with the consequences if they don't.