Reality cheque: A review on the mechanism for adjusting the levels of grants and loans for academic and living expenses is underway and should be finished in the coming year.

Few borrowers seek large loans under the Student Financial Assistance Agency's schemes, Secretary for Education & Manpower Professor Arthur Li says, adding an effective mechanism handles students with difficulties in loan repayment.

About 12% of all borrowers using the schemes took out an accumulated loan of $100,000 or above, and less than 0.6% have an accumulated loan of $200,000 or more. The average accumulated loan under the schemes is about $54,000. The average monthly repayment amount ranged from about $300 to about $1,000, depending on the scheme.

In the past five academic years, the number of borrowers under the four schemes - Local Student Finance Scheme, Non-means-tested Loan Scheme, Financial Assistance Scheme for Post-secondary Students and Non-means-tested Loan Scheme for Post-secondary Students - with a total accumulated loan amount ranging from $100,000 to $199,999 was 11, 025, he said. Just 489 people took out loans ranging from $200,000 to $299,999, and six had loans of $300,000 or more. 

Those whose total accumulated loan amount was at $100,000 or more, had accumulated loans ranging from about $110,000 to about $149,000.  The highest accumulated loan amount ranged from about $155,000 to about $308,000.

Assistance limit updated regularly

Turning to students' academic and living expenses, Prof Li said the maximum amount of assistance for payment of these expenses is updated annually, based on consumer price movements and the input from tertiary institutions.

In the 2005-06 academic year, the maximum grants for payment of students' academic expenses under the Local Student Finance Scheme ranges from $4,420 to $25,100, depending on the applicant's academic discipline. The maximum loan payable for living expenses under all relevant schemes is capped at $33,850.

A review of the mechanism for adjusting the levels of grants and loans for academic and living expenses is underway and should be ready in the coming year, he added.