Decision No. 1134/2001/QD-NHNN on the issuance of the Regulation on lending for students at universities, colleges, vocational high schools, and vocational training institutions.

Pursuant to …;

Regarding the issuance of the Loan Regulations applicable to students at universities, colleges, vocational high schools, and vocational training centers

universities, colleges, vocational high schools, and occupational training institutions

__________________________

 

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the Law on the State Bank of Vietnam and the Law on Credit Organizations dated December 12, 1997;

Pursuant to Decree No. 15/CP dated March 2, 1993 of the Government on the tasks, powers, and responsibilities for management of ministries and ministerial-level agencies;

Pursuant to Decision No. 51/1998/QĐ-TTg dated March 2, 1998 of the Prime Minister on establishing the Education Credit Fund;

Pursuant to the proposal of the Director of the Monetary Policy Department,

Pursuant to …;

Article 1. The Loan Regulations applicable to students at universities, colleges, vocational high schools, and vocational training centers are hereby promulgated together with this Decision.

Article 2.This Decision takes effect from October 1, 2001, replacing Decision No. 219/1998/QĐ-NHNN1 dated July 1, 1998 of the Governor of the State Bank of Vietnam on the issuance of the Student Loan Regulations for students at universities, colleges, vocational high schools, and vocational training centers.

Article 3.Heads of units under the State Bank of Vietnam, Governors of provincial and centrally-administered city branches of the State Bank of Vietnam; Chairmen of Management Councils and General Directors of commercial banks or policy banks assigned the task of lending to students shall be responsible for implementing this Decision.

REGULATIONS

LOAN REGULATIONS APPLICABLE TO STUDENTS AT UNIVERSITIES, COLLEGES, VOCATIONAL HIGH SCHOOLS, AND VOCATIONAL TRAINING CENTERS
(Issued together with Decision No. 1134/2001/QĐ-NHNN dated September 26, 2001 of the Governor of the State Bank of Vietnam)

Article 1. Scope of Application

These regulations govern the provision of loans in Vietnamese Dong by commercial banks or policy banks assigned the task of lending to students at universities, colleges, vocational high schools, and vocational training centers from the Education Credit Fund established pursuant to Decision No. 51/1998/QĐ-TTg dated March 2, 1998 of the Prime Minister.

Article 2. Definitions

1. Abbreviations used in these regulations:

- Students are referred to as students.

- Universities, colleges, vocational high schools, and vocational training centers are referred to as schools.

- Commercial banks or policy banks assigned the task of lending to students are referred to as Banks.

- Family representatives of students or legally recognized sponsors of students in Vietnam who commit to repayment in the loan application form are referred to as guarantors.

2. Loan term is the period calculated from when the student receives the first loan until the time all principal and interest due under the credit agreement are repaid.

3. Repayment periods are the intervals within the loan repayment period specified in the credit agreement during which the student must repay part or all of the loan amount.

4. Adjustment of repayment periods refers to the Bank's approval for the student to change the repayment periods previously recorded in the credit agreement.

5. Extension of loan repayment refers to the Bank's approval to extend the loan repayment period beyond that specified in the credit agreement.

6. End of study period is the point in time when the student completes their final examination or thesis defense.

Article 3. Borrowing Students

1. Regular full-time students enrolled at public, semi-public, or private universities, colleges, vocational high schools, and vocational training centers with a minimum training duration of one year, whose loan eligibility in the first academic year is based on the average grade of the first semester and from the second academic year onwards is based on the average grade of the preceding academic year, as follows:

a. For students falling under the policy category as stipulated in Point 1, Section I of Circular Joint Circular No. 26/1999/TTLT-BLĐTB&XH-BGD&ĐT dated November 2, 1999, and students who are poor or belong to poor households according to the criteria set forth in Decision No. 1143/2000/QĐ-LĐTBXH dated November 10, 2000 of the Ministry of Labor, Invalids, and Social Affairs; non-policy students with permanent residence registration before enrollment in the urban area: Achieve an expanded average grade of 5.0 or higher.

b. For non-policy students with permanent residence registration in rural areas before enrollment: Achieve an expanded average grade of 6.0 or higher.

c. For non-policy students with permanent residence registration in mountainous areas before enrollment: Achieve an expanded average grade of 7.0 or higher.

The provisions regarding students in urban, rural, and mountainous areas shall be implemented in accordance with the Admissions Regulations issued by the Minister of Education and Training pursuant to Decision No. 05/1999/QĐ-BGD&ĐT dated February 23, 1999.

2. For students enrolled at schools and who have already received loans from the Education Credit Fund but face difficult circumstances preventing them from continuing their studies, upon approval by the school's administration to take a leave of absence for a limited period and retain their academic standing to resume studies later, the time spent at the school includes the approved leave period. When the student returns to continue their studies, loan eligibility will be based on the academic performance of the last academic year before taking the leave.

Article 4. Conditions for Borrowing Funds

Students must meet all of the following conditions:

1. Belong to the target group specified in Article 3 of this Regulation.

2. The purpose of using borrowed funds is to cover educational expenses during the period of study at schools.

3. The representative of the student's family or the legally recognized guardian of the student in Vietnam commits in the Student Loan Application regarding the responsibility to repay the debt on behalf of the student in case the student transfers schools, withdraws from school, is removed from the list of students, or after completing the course at the schools if the student fails to repay the principal and interest of the loan according to the due date or does not fully repay the debt when it reaches the final repayment deadline.

Article 5. Purpose of the Loan

It includes purchasing textbooks, learning materials, research tools, and other expenses serving the education of students during their time at school.

Article 6. Amount of the Loan

The amount of the loan for each student shall be determined by the lending bank based on the borrowing needs of each student, but shall not exceed 200,000 VND per student per month.

Article 7. Term of the Loan

The term of the loan includes the grace period and the repayment period:

1. The grace period is the duration from the date the student receives the first loan until the end of the course, including the time when the student is allowed to take a leave of absence with the retention of academic standing (if applicable).

2. The repayment period is calculated based on the number of years the student borrows funds from the bank during their time at school.

Article 8. Interest Rate on the Loan

1. The interest rate on the loan for students is lower than the general interest rate of commercial banks during the same period. The specific interest rate is announced by the Governor of the State Bank based on consensus with the Minister of Education and Training.

2. The overdue interest rate is 120% of the interest rate stipulated in the credit agreement.

Article 9. Loan Application Documents

1. Students fill out the Loan Application Form provided by the bank. This form is filled out only once, valid for the entire course, and submitted to the bank upon the first loan application, which includes the following elements:

- A commitment from the representative of the student's family or the legally recognized guardian of the student in Vietnam regarding the responsibility to repay the debt on behalf of the student in case the student transfers schools, withdraws from school, is removed from the list of students, or after completing the course at the schools if the student fails to repay the principal and interest of the loan according to the due date or does not fully repay the debt when it reaches the final repayment deadline.

- Confirmation from the People's Committee of the commune, ward, town where the representative of the student's family or the legally recognized guardian of the student in Vietnam has permanent residence about the address and signature of the representative of the student's family or the legally recognized guardian of the student in the Loan Application Form being correct and the financial situation of the student's family is unable to cover the educational expenses of the student, thus the student has a need to borrow funds.

- Confirmation from the School Management Board or a person authorized by the School Management Board that the student belongs to the target group eligible for consideration for a loan under Article 3 of this Regulation.

2. In cases where students belong to policy groups, they must provide a copy of the Certificate of Recognition issued by the competent state agency, confirmed by the schools, taken from the student's file currently stored at the schools.

3. Students and the bank sign a credit agreement at the first loan application, valid for the entire course.

4. Students prepare a Commitment to Repay Principal and Interest after completing the course.

Article 10. Procedure for examination and lending

The procedure for providing loans to students shall be carried out as follows:

1. At the beginning of each academic year, students eligible for loans shall register their loan applications with the schools.

2. Schools shall verify and prepare a list of students eligible for loans to send to the Bank; at the same time, they shall distribute pre-printed Loan Application Forms provided by the Bank for students to complete all required contents and elements as stipulated in Clause 1, Article 9 of this Regulation.

3. Students shall submit the Loan Application Form to the Bank; in cases where students are eligible under policy provisions, they must also attach a Confirmation Letter from the relevant state agency as specified in Clause 2, Article 9 of this Regulation.

4. If the Bank approves the loan, it shall enter into a credit agreement with the student; if the loan is not approved, the Bank must notify the schools and students in writing, specifying the reasons for the rejection.

Article 11. Repayment of Principal and Interest on Loans

1. During the period of study at the schools, students are not required to repay the principal and interest on loans; interest on loans shall be calculated from the day following the completion of the course until the full repayment of the principal.

2. Students must make their first repayment of the principal and interest on loans within six months from the date of completing the course.

3. In cases where students transfer to another school, withdraw from school, have their names removed from the student list, or fail to repay the loan according to the schedule after completing the course at the school, the guarantor must fulfill the obligation to repay the debt.

4. Interest on loans shall be calculated according to the method prescribed in Clause 2, Article 10 of the Decision No. 652/2001/QĐ-NHNN dated May 17, 2001 issued by the Governor of the State Bank of Vietnam regarding the calculation method and accounting of income and expenditure of interest by the State Bank and credit organizations.

Article 12. Extension of Loan Debt and Adjustment of Repayment Period

1. When the repayment period specified in the credit agreement arrives, if the student or guarantor is unable to fully repay the principal and interest on the loan due to objective reasons, the student or guarantor must submit a Request for Adjustment of Repayment Period to the Bank for consideration; if the repayment period is not adjusted, the Bank will transfer the outstanding loan to overdue debt.

2. When the final repayment period specified in the credit agreement arrives, if the student is unable to fully repay the debt due to objective reasons and the guarantor is also unable to repay, the student or guarantor must submit a Request for Extension of Debt to the Bank; the Bank will consider extending the debt with a maximum term of two years, starting from the final repayment date; if the extension is not granted, the Bank will transfer the outstanding loan to overdue debt.

3. The request for adjustment of the repayment period or extension of debt by the student or guarantor and the Bank's resolution must be completed before the repayment deadline.

Article 13. Reduction of Loan Interest Rate

1. Students who fully repay the principal and interest on the loan before the final repayment date specified in the credit agreement shall have their remaining interest reduced as follows:

a. Early repayment of four years or more results in a 30% reduction.

b. Early repayment of three years to less than four years results in a 20% reduction.

c. Early repayment of two years to less than three years results in a 15% reduction.

d. Early repayment of one year to less than two years results in a 10% reduction.

đ. Early repayment of less than one year results in a 5% reduction.

2. For students who suffer property losses due to objective reasons and whose families face economic difficulties, confirmed by the People's Committee of the commune, ward, town where the student resides or where the family resides after the completion of the course, if they can only repay the principal and part of the interest, the Bank may consider reducing the interest rate on the loan for these students, with a maximum reduction of 50% of the remaining interest.

3. The Bank shall waive interest on loans for students who encounter risks due to objective reasons as stipulated by the Ministry of Finance regarding financial management regulations for the Education Credit Fund.

Article 14. Rights and Obligations of the Bank

1. The Bank has the right to:

a. Require students and guarantors to provide complete information related to the student's borrowing and repayment.

b. Refuse loan requests from students if they do not meet borrowing conditions or if the Education Credit Fund does not have sufficient funds for lending.

c. Terminate lending, recover debts ahead of schedule in cases where false information is discovered, credit contract violations occur, students transfer schools, withdraw from school, or are removed from school lists by educational institutions.

d. Sue students who violate credit contracts or guarantors who fail to fulfill their guarantee obligations as stipulated by law.

đ. Reduce interest on loans, adjust debt terms, and extend debt repayment periods according to the provisions of this Regulation.

e. Send notifications to guarantors and the student's workplace unit after completing the course to urge repayment.

2. The Bank has the obligation to:

a. Fulfill agreements in the credit contract.

b. Maintain credit files in accordance with legal regulations.

Article 15. Rights and Obligations of Students

1. Students have the right to:

a. Refuse requests from the Bank that do not comply with this Regulation and commitments in the credit contract.

b. File complaints and initiate lawsuits against breaches of the credit contract as stipulated by law.

2. Students have the obligation to:

a. Provide complete and truthful information and documents related to borrowing and promptly notify changes in residence or workplace after completing the course to the Bank; bear responsibility for the accuracy of the provided information and documents.

b. Use borrowed money for its intended purpose and fulfill all commitments in the credit contract and Debt Repayment Commitment Letter.

c. Within no more than 10 days after completing the course, students still owing loans must go to the Bank to make a Debt Repayment Commitment Letter specifying the contact address, payment method for debt repayment, and submit this letter to the school for graduation certificate procedures.

d. Bear legal responsibility when failing to fulfill commitments regarding principal and interest repayment.

Article 16. Responsibilities of Guarantors

1. Guarantee repayment in the Student Loan Application Form as stipulated in Clause 1, Article 9 of this Regulation.

2. Repay the principal and interest on behalf of the student in cases where the student fails to repay on time, transfers schools, withdraws from school, or is removed from the student list by educational institutions but lacks the ability to repay.

3. Provide accurate information about the student's circumstances, place of residence, and workplace after completing the course to the Bank.

4. Submit a request for debt extension or term adjustment to the Bank on behalf of the student when the student cannot repay at the due date due to objective reasons and has not submitted a request to the Bank.

Article 17. Responsibilities of Educational Institutions

1. Confirm in the Student Loan Application Form as stipulated in Clause 1, Article 9 of this Regulation.

2. Compile and send to the Bank a list of students meeting borrowing conditions and bear responsibility for the accuracy and correctness of this list.

3. Promptly and accurately inform the Bank of lists of students transferring schools, withdrawing from school, being disciplined, removed, suspended, or expelled.

4. Cooperate with the Bank in monitoring the borrowing and usage process of students.

5. Notify the Bank of the graduation exam or thesis defense completion date for students to serve as a benchmark for calculating interest on loans as stipulated in Clause 6, Article 2 and Clause 1, Article 11 of this Regulation.

6. Require students to submit a Debt Repayment Commitment Letter confirmed by the Bank before issuing the graduation certificate and returning the file to the student.

7. Require students who owe loans and are transferring schools, withdrawing from school, or removed from the student list to fully repay their loans.

Article 18. Responsibilities of the People's Committee of Communes, Wards, and Towns

1. Confirm in the Student Loan Application Form as stipulated in Clause 1, Article 9 of this Regulation.

2. Urging repayment of debt and implementing administrative measures against students and those who have committed to repay the debt on behalf of the students when receiving a request from the Bank regarding the students' failure to repay the debt on time.

3. Notifying the Bank about changes in the residence and workplace of the students and those who have committed to repay the debt on their behalf.

Article 19. Implementation

1. The Bank assigned the task of lending to students shall, based on the provisions of the Civil Code, Law on Credit Institutions, and this Regulation, prepare pre-printed Loan Application Forms, Credit Contracts, and Debt Repayment Commitment Letters for students to use in loan application procedures.

2. The Bank assigned the task of lending to students, students borrowing funds, those who have committed to repay the debt on behalf of the students, schools, and the People's Committee of Communes, Wards, and Towns shall be responsible for implementing the provisions of this Regulation.

3. Heads of units under the State Bank, Branch Directors of the State Bank in provinces and cities shall be responsible for inspecting, supervising, and monitoring Banks assigned the task of lending to students according to their assigned functions and tasks.

4. Any amendments or supplements to this Regulation shall be decided by the Governor of the State Bank.