Government’s loans for poor students: Money for life

The Prime Minister’s decision to make higher levels of credit available to students eases the burden on both students and families alike. Report below shows more clearly.
Imagine an outstanding student from a remote province coming to the city to study at university, but trying to borrow money for life’s daily needs. Imagine her disappointment at being refused a bank loan. Imagine her dropping out of school solely for financial reasons. Imagine the tears rolling down her check. (OOP)
Such was the situation faced by Nguyen Phuong Thuy from Thai Binh province, who last year was a third year student at the Faculty of Literature at the Hanoi National University. Having lost both her mother and father at the age of eight, Thuy did not have to pay tuition fees but finding money for her daily needs proved to be a nightmare.
“Life in the city was and still is very difficult,” said Thuy. “Every month I received VND200,000 ($12.5) from my sister and it was hard to find a job as I have no connections. I was duped by a job centre and lost money. I also used to live on a loan from the class fund and the scholarship for good students. When the situation became desperate I decided to drop out of school for a year.”
Returning to her studies this year, Thuy’s concerns have been partly eased as she now has a job and, more importantly, she can benefit from a new government policy in Decision 157/2007/QD-TTg, under which she can borrow up to VND800,000 ($50) a month for her daily needs. “The money will make life a lot easier,” said Thuy.
The Prime Ministerial Decision, according to Deputy Prime Minister and Minister of Education and Training, Mr Nguyen Thien Nhan, is timely and has considerable political significance, attracting interest from all citizens. The policy, he said, is evidence of Vietnam’s social justice.
“Providing loans for poor students is a very good policy,” said Ha Thanh Tung from Hanoi. “There is nothing as good as investing in education and we should not allow students to drop out of school and forego opportunities just because of money. The country still lacks talent so we should invest more in our educational system. Imagine if everybody in Vietnam could communicate in English and use a computer. Vietnam would be stronger, even more than China.”
“As a lecturer for many universities and also a sociologist I can see no plausible reason to oppose this decision from the Prime Minister,” said Dr Trinh Hoa Binh from the Institute of Sociology under the Vietnamese Academy of Social Sciences. “After all, the salaries of many lecturers are more or less paid from student fees. If the students can pay fees then the lecturer’s life can be guaranteed, and that’s good for students. In addition, the policy affirms the important role played by students in society. The ‘student’ brand name has become a trusted thing when borrowing money. It is easier for them than for others who have to have collateral.”
Each student can borrow up to VND800,000 from the Vietnam Bank for Social Policy at an interest rate of 0.5 per cent per month, up from the previous VND300,000 ($20) with an interest rate of 0.65 per cent. Students will not have to repay the loan until a year after completing their studies.
“As a father with children pursuing academic achievements I support the policy,” said Nguyen Van Thuong from Hanoi. “It will be particularly helpful for those facing difficulties or from remote areas. The debt from four years of study could be quite a sum and may lead to two cases. The first is that it will burden the student’s family, but this should encourage them to study harder and find a good job after graduation. And that’s also good the country’s economy. The other case may be that the state is unable to collect the debt from some people.”
“I think the policy will help a lot of students, as many of them come from rural areas and do not have the support of their families, as city dwellers like myself do,” said Duong Thu Trang, a student from Hanoi. “They will have money to cover their everyday needs. The time of settling the debt, though, should be lengthened to two years because who can say for sure if, after a year, they will have a job that allows them to repay it.”
According to Tran Thi Hoai, a poor student at the Academy of Technology Science, the income earned from farming is very small. “My family have not much land to cultivate and our monthly income is only VND400,000 to VND 500,000 ($25 to $31), while I need VND600,000 to VND700,000 ($37.5 to $44) per month to live,” she said. “Before the policy, my family usually had help from relatives and from extra work. Now things can change, as my parents will not be under such a strain. It will still be difficult, but after I graduate I can earn a living and repay the debt.”
As a developing country with more than 70 per cent of its population living in rural areas and reducing hunger and poverty remaining an important task, the decision really does represent good policy. Calculations by the Vietnam Bank for Social Policy indicate that 25-30 per cent of students throughout the country will have access to the loans.
To immediately help poor students, according to Mr Pham Phan Dung, Head of the Banking and Finance Department under the Ministry of Finance, the Ministry asked for permission from the Prime Minister to use VND500 billion on student loans at the beginning of October.
As a third year student with an average result of 9.0 in her first two years, Thuy hopes to work just a little and concentrate a great deal on her studies, as she hopes to become a lecturer at her university. “Borrowing from the state means I have more time to learn and pursue my goal of becoming a good teacher,” she said happily. “I hope to finish school early and start work to repay the debt. My dream, I think, is possible.”
Applicable students
Students in difficult circumstances studying at universities, colleges, intermediate and vocational training schools established according to Vietnamese law, including:
1. Orphaned students, those without either a mother or father, or those whose parents are unable to work.
2. Students that are members of households belonging to the following groups:
- Poor households, according to the law;
- Households with per capita income equal to 150 per cent of a poor household’s per capita income, according to the law.
3. Students facing financial difficulties caused by accidents, natural disasters, fires, or pandemics during school time. Difficulties must be confirmed by local authorities.
Students already borrowing money during their time at intermediate schools or colleges, who then study at colleges or universities
(Source: CPV)