Students are eligible for monthly loans of VND4 million according to the new regulation
The amending decision has supplemented several articles of the Prime Minister's Decision No. 157/2007/QD-TTg on credit for students; accordingly, the loan amount will increase from VND2.5 million a month to VND4 million a month.
The decision also amends regulations on loan principal and interest repayment. Specifically, from the date a student finishes the 12-month course as prescribed, student loan borrowers must pay the original amount of their loans and interest for the first time. Borrowers can repay their loans early without paying interest on early repayment.
For credit loan contracts signed before May 19, 2022, the Bank for Social Policies (VBSP), customers and related parties can continue to perform according to their commitments, rights and obligations, and responsibilities in the signed contract. The above maximum loan amount applies to new disbursements from May 19, 2022.
The Ministry of Education and Training said that according to Decree No. 86/2015/ND-CP, in terms of current tuition fees, the current loan of VND2.5 million a month only meets 49 percent of the tuition fee of the industry group with the highest tuition fee and 38.5 percent of the student's need for study expenses including tuition and living expenses.
Currently, it is estimated that the cost of studying for a student is about VND6.5 million per month to VND9.5 million per month, the highest tuition fee.
According to VBSP, in 2007, at the time of promulgation of the Prime Minister's decision on students’ maximum loan amount of VND800,000 a month, it satisfied about 66 percent of a student’s total study cost.
As of 2019, the loan increased to VND2.5 million per month a student which met about 60 percent of a student’s study cost. However, up to now, the current loan only meets 37 percent of the total study expenses of students, plus the cost of living continues to increase, a student from low-income families finds it difficult to pursue their study with the current loan amount of VND2.5 million a month.
Therefore, relevant ministries and sectors propose to increase the maximum loan amount for students to match the tuition fee increase schedule, the VBSP's ability to mobilize capital, the ability to compensate the interest rate difference, and the bank's state management fees.
The increase in students’ loan levels aims to support students to cover study costs; thereby, contributing to stabilizing the life and ideas of households and students, improving the people's intellectual level. Students are generally borrowing more because college tuition has grown many times faster than income.
