Students desperate for school loans

VietNamNet Bridge – The Vietnam Bank for Social Policies has tightened lending to fund university study, which has stunned a lot of students. They do not know how they can find enough money to keep studying.

Nguyen Van Tong and his wife

On the morning of October 4, Nguyen Van Tong and his wife in Ben Tre province, traveled 15 kilometres to the district branch of the Bank for Social Policies to receive a promised loan disbursement. Tong planned to remit the money to his two sons studying at universities in HCM City to pay tuition.

Tong and his wife could not get the money. “I was told that my household is not listed as poor or nearly-poor, therefore, I cannot borrow more money. The bank even asked me to pay my debt of 27.2 million dong. How can I get enough money to pay sons’ tuition?” Tong exclaimed.

The Vietnam Bank for Social Policies has released a notice that, from the 2010-2011 academic year, only students in poor conditions can borrow money. They can borrow once for 12 months (860,000 dong a month) at maximum. Those who borrowed money before, but now do not meet the new requirements, will no longer receive funds.

Le Quang Trac in Ben Tre province related that his son passed the entrance exam to the HCM City National University in 2008. In that year, the Bank for Social Policies agreed to loan 32 million dong to his son. 16.6 million dong has been disbursed over the last two years, but now they say his son cannot borrow money any more, because his household is not considered poor.

“I think I now have only one choice. I will have to borrow money on the black market at the high interest rate of 12 percent and send it to my sons in HCM City," Tong acknowledged.

“If I had known that my sons could not borrow money, I would not have let them attend university,” he added.

Branches of the Bank for Social Policies have halted disbursements to follow the new legal document dated September 16. The law provides new regulations on lending for university study, received from Deputy Prime Minister Nguyen Thien Nhan at a recent meeting on the credit program for students.

By August 2010, Ben Tre province alone had had 260,000 households approved for loans. In Tien Giang province, according to Nguyen Thi Tac, Deputy Director of the branch of the Bank for Social Policies, they had lent 403 billion dong to 33,000 households in the province.

Some bankers have estimated that the new regulations would have a direct effect on 70 percent of students, who had previously been approved. According to Nguyen Van Ly, Deputy General Director of the Bank for Social Policies, to date, 1.9 million students from 1.7 million of households have borrowed 24 trillion dong under the program to fund uni studies.

In 2010, the bank planned to disburse capital by early September 2010, but no student has been able to borrow money so far. “We estimated that five trillion dong worth of capital will be needed for this school year, but we have no capital to lend,” he admitted.

Source: Tuoi tre