Hong Kong Ombudsman slams student loan scheme over 13,000 default cases
Ombudsman notes there were 13,000 default cases over past three years and the government is not doing enough to tackle the problem
The government's student loan scheme is open to exploitation, the Ombudsman said, highlighting 13,000 default cases recorded over the past three years involving at its peak HK$200 million in unpaid debts.
Over half of the unpaid debts came from the extended non-means-tested loan scheme, which offers loans at lower-than-market rates - mostly to the working population to enrol in part-time courses.
The scheme, offered by the Working Family and Student Financial Assistance Agency, accounted for up to 69 per cent of default cases between 2011 and last year.
The remaining cases came from the non-means-tested loan scheme for tertiary students.
The agency loaned out between HK$1 billion and HK$1.3 billion annually over the past three years.
In 2013-14, the extended scheme accounted for about 70 per cent of default cases and 40 per cent of 2,128 cases involving HK$100,000 or more.
Each Hongkonger is entitled to a maximum lifetime loan limit of HK$325,700.