Decision No. 107/2006/QĐ-TTg on credit for students

Pursuant to …;

Regarding student loans for high school and college students

___________

PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to Decree No. 78/2002/NĐ-CP dated October 4, 2002 of the Government on credit for the poor and other policy beneficiaries;

Considering the proposal of the Minister of Finance.

Pursuant to …;

Article 1. Borrowers:

High school and college students with difficult circumstances studying at universities (or equivalent to university level), colleges, vocational secondary schools, and vocational training institutions as stipulated in Article 2 of Decree No. 78/2002/NĐ-CP dated October 4, 2002 of the Government.

Article 2. Purpose of the loan:

The purpose of the loan is to cover part of the costs for education and living expenses of high school and college students during their study period at school, including tuition fees; costs for purchasing textbooks, learning materials, and research tools; other costs.

Article 3. Borrowers as specified in Article 1 of this Decision must meet the following conditions:

1. High school and college students residing in households registered with permanent residence or long-term temporary residence registration in the locality where the loan is provided.

2. High school and college students admitted and currently enrolled in full-time programs at universities, colleges, vocational secondary schools, and vocational training institutions with a training duration of one year or more.

Article 4. Loan method:

The provision of loans by the Social Policy Bank for high school and college students with difficult circumstances shall be implemented through the household of the students. The household acts as the representative of the students directly borrowing from, repaying debts to the Social Policy Bank, and bearing responsibilities and enjoying rights as prescribed by law.

Article 5. Loan amount:

The loan amount for high school and college students is determined by the Social Policy Bank based on its financial capacity and the borrowing needs of eligible borrowers. The loan amount is set monthly, annually, and per academic program by the Social Policy Bank and announced publicly.

Article 6. Loan term:

1. The loan term is the period from when the borrower begins receiving the loan until the debt (principal and interest) is fully repaid as agreed in the credit contract. The loan term includes the disbursement period and the repayment period.

2. The disbursement period is the time from when the borrower receives the first loan installment until the end of the academic program, including any approved leave periods and retained academic standing (if applicable). The disbursement period is divided into disbursement periods as defined by the Social Policy Bank.

3. The repayment period is the time from when the borrower makes the first repayment until the debt (principal and interest) is fully repaid. The maximum repayment period equals the disbursement period. The repayment period is divided into repayment periods as defined by the Social Policy Bank.

Article 7. Interest rate on the loan:

1. The interest rate on the loan is applied according to the interest rate for poor household loans decided by the Prime Minister.

2. The overdue interest rate is calculated at 130% of the loan interest rate.

Article 8. Loan application documents:

1. Borrowers must complete all loan application documents as required by the Social Policy Bank, similar to those for poor household loans.

2. Borrowers must have a confirmation letter from universities, colleges, vocational secondary schools, and vocational training institutions regarding the admission or current enrollment of the students.

Article 9. Procedures and formalities for providing loans are regulated by the Social Policy Bank to ensure simplicity, clarity, and ease of implementation.

Article 10. Repayment of principal and interest on the loan:

1. During the disbursement period, borrowers do not need to repay the principal and interest; interest on the loan is calculated from the date the borrower receives the first loan installment until the principal is fully repaid. For interest accrued during the disbursement period, the Social Policy Bank will negotiate with the borrower to determine the repayment period within the repayment period.

2. Borrowers must make the first repayment of principal and interest within six months from the end of the academic program.

Article 11. Adjustment of debt repayment periods, extension of debt repayment, and transfer of overdue debt.

1. When the principal and interest repayment period specified in the credit contract has arrived, and the borrowing entity is unable to repay the debt and submits a written request, the Vietnam Bank for Social Policies shall consider adjusting the debt repayment period.

2. When the full amount of principal and interest due under the credit contract must be repaid, and the borrowing entity is unable to repay part or all of the debt (including both principal and interest) and submits a written request, the Vietnam Bank for Social Policies shall consider extending the debt repayment period. The maximum extension period shall be half of the repayment period prescribed in Clause 3, Article 6 of this Decision.

3. In cases where the borrowing entity fails to repay the debt according to the final repayment period and is not permitted to extend the debt, the Vietnam Bank for Social Policies shall transfer the debt to overdue status. The Vietnam Bank for Social Policies shall cooperate with local authorities and political-social organizations to take measures to recover the debt.

4. The Vietnam Bank for Social Policies shall specify in detail the procedures for adjusting debt repayment periods, extending debt repayment, and transferring debt to overdue status.

Article 12. Handling risks due to objective reasons:

The handling of debts at risk due to objective reasons shall be carried out in accordance with the regulations on the Rules for Handling Debts at Risk at the Vietnam Bank for Social Policies.

Article 13. Responsibilities of agencies:

1. The Ministry of Finance

a) Take the lead and coordinate with relevant ministries, sectors, and localities to establish criteria for students and trainees from difficult circumstances; simultaneously guide, inspect, and supervise the implementation of this Decision.

b) Coordinate with the Ministry of Planning and Investment to develop annual supplementary credit plans and interest rate subsidy plans for the Vietnam Bank for Social Policies to fulfill assigned tasks.

2. Ministry of Planning and Investment

Take the lead and coordinate with the Ministry of Finance to develop credit plans for student loans within the total annual supplementary lending capital for the Vietnam Bank for Social Policies to fulfill poverty alleviation and policy-targeted lending tasks, and interest rate subsidy plans for the Vietnam Bank for Social Policies, to be submitted to the Prime Minister for consideration and decision.

3. The Ministry of Education and Training.

Direct universities, colleges, and vocational schools nationwide to confirm enrollment for students and trainees studying at these institutions through simple, quick, and convenient procedures to facilitate the loan approval process.

4. The State Bank of Vietnam, within its functions and responsibilities, shall direct the Vietnam Bank for Social Policies to develop lending procedures and processes; implement inspections and audits of the implementation of credit policies for students and trainees by the Vietnam Bank for Social Policies.

5. People's Committees of provinces and centrally-administered cities.

Direct functional agencies and People's Committees at all levels to implement credit policies for students and trainees in accordance with the provisions of the law and this Decision.

Article 14. Implementation organization:

1. This Decision takes effect 15 days after its publication in the Official Gazette and replaces Decision No. 51/1998/QĐ-TTg dated March 2, 1998, of the Government Chairman regarding the establishment of the Education Credit Fund.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of provincial and centrally-administered city People's Committees, Chairmen of the Board of Directors, and General Directors of the Vietnam Bank for Social Policies are responsible for implementing this Decision./.