President Ma Ying-jeou convened a press conference on the morning of September 19 at the Presidential Office to announce measures to make it easier for students to pay off government-issued student loans. The measures include extending the period for repayment, relaxing eligibility requirements for repayment extensions, and expanding the availability and amount of cost-of-living loans (formerly extended only to students from low-income households, and now available also to students from lower-middle income households). All of these initiatives are aimed at reducing economic pressure on students from underprivileged households.
President Ma remarked that education is a crucial link in maintaining the strength of Taiwan's human resources. The government's decision to relax conditions governing student loans is being carried out to help young people continue their studies, thus preventing them from cutting short their educational pursuits due to economic considerations. This will provide students with a better opportunity to complete their academic studies, he said, adding that after they have graduated and found work, they can then gradually pay off their student loans.
The president stated that while current student loan policies are an improvement from the policies that were in place before he took office in May 2008, two areas still require further amendment. The first, he pointed out, is the target group that the policies seek to help. President Ma said that these latest measures are directed at providing preferential treatment to students from low-income and lower-middle income households. The second area that needs to be addressed, he continued, is repayment terms, as this will reduce the economic burden on students. The new policy of easier repayment terms includes three concrete measures, the president noted, namely the extension of repayment schedules, easing of eligibility requirements for applicants requesting an extended repayment schedule, and increased cost-of-living loans to students from low-income and lower-middle income households.
Commenting on the extension of repayment periods, President Ma explained that under the current system the government absorbs all of the interest on student loans granted to students from underprivileged households during the time they are in school and for one year following the conclusion of military service for conscripts. Students have one year to pay off loans taken out for each semester, but can apply to have this period extended to 1.5 years. In the future, the president said, rules will be further amended to extend the repayment period for up to two years. The extended period will help to alleviate the financial burden on students, President Ma remarked, adding that it is expected that some 100,000 students from underprivileged
households will benefit from the changes, and that the government in the first year of the changes will need to cover about NT$150 million in interest.
As for relaxing eligibility requirements for extension of the loan repayment period, President Ma remarked that currently only students from low-income families or those earning less than NT$25,000 a month are eligible to apply for extensions. In the future, this will be widened to include students from lower-middle income households and those who make less than NT$30,000 a month. If students still face difficulties in repaying loans, they can apply for extensions of the repayment period. They will be eligible for a one-year extension for each application, and borrowers can apply up to three times, he said. President Ma estimated that about 100,000 students from disadvantaged households will benefit from this measure and that in the first year, the government will need to shoulder about NT$390 million in associated interest.
With regard to cost-of-living loans, President Ma stated that students from low-income households will become eligible for cost of living loans of up to NT$8,000 a month, compared with the current NT$6,000, while students from lower-middle income households will be eligible to obtain up to NT$4,000 a month for this type of loan. He said that these loans are aimed at helping these students focus on their studies and not take on part-time jobs. The president estimated that at least 100,000 students from underprivileged households will benefit from this measure, adding that the government will need to shoulder about NT$100 million in interest on such loans annually.
President Ma stated that the new measures will be implemented from the second semester of the current academic year. The second semester starts on February 1, 2012. At the same time, he said that the credit guarantee fund established by the Ministry of Education in 2003 has significantly reduced interest on student loans. He pointed out that the annual lending rate is presently 1.83%, which is considerably lower than the 3.64% level in May of 2008 when he took office. In addition, presently 446,750 students are assisted by student loans and 817,406 applications for student loans are filed per year, with the government spending over NT$3 billion subsidizing the interest on these loans on average each year, he said. (Note: Subsidies in the 2007, 2008, and 2009 academic years stood at NT$4.16 billion, NT$3.61 billion, and NT$2.88 billion, respectively.)
President Ma stressed that the government has consistently placed great importance on narrowing the wealth gap here and that it hopes to introduce policies to further meet the needs of the underprivileged, so that the children of the disadvantaged will have an opportunity to change their destiny. These measures are expected to stimulate their ambition and vitality, and help them to pursue a better life, he said.
Accompanying President Ma at the press conference were Vice President Vincent C. Siew, Presidential Secretary-General Wu Jin-lin (伍錦霖), Vice Premier Sean C. Chen (陳冲), Executive Yuan Secretary-General Lin Join-sane (林中森), and Education Minister Wu Ching-ji (吳清基).