The Ministry of Education’s addition of a monthly allowance to its student loan program could leave a growing number of students with debt nightmares, Democratic Progressive Party Legislator Kuan Bi-ling (管碧玲) said yesterday.
Kuan said during a question-and-answer session at an Education and Culture Committee meeting that a college graduate might be left with debts of up to NT$400,000 (US$11,700) if he or she depended on a loan to pay for four years of college.
Students would owe another NT$240,000 by the time they graduate if they applied for the NT$6,000 monthly allowance the ministry introduced as part of its student loan system, Kuan said.
“With current student loan interest rates, these students would have to pay about NT$7,000 per month for about eight years to repay the loan,” Kuan said.
“How can a recent graduate with a monthly salary of NT$20,000 get married and have a family if he or she has to pay off a student loan and rent as well?” she said.
Kuan voiced her opposition to the plan after the ministry on Wednesday introduced a program in which students whose annual family income was less than NT$1.2 million (US$35,500) could apply to borrow a maximum of NT$6,000 per month to cover living expenses.
The measure would take effect in the next semester at the earliest, the ministry said.
The number of students applying for student loans has been on the rise since the 1994 academic year, the latest ministry figures show. The figure has grown from 40,000 applicants in 1994 to 759,000 in the 2007 academic year.
The ministry’s data show that unpaid student debt stands at NT$4.4 billion and is expected to exceed NT$4.5 billion by the end of the year.
Instead of issuing more loans, the ministry should make more scholarships available, Kuan said.
Vice Minister of Education Wu Tsai-shun (吳財順) responded to Kuan’s concerns by saying the ministry planned to have the government fully subsidize the interest on student loans for people from low-income families.