Decision No. 157/2007/QĐ-TTg on credit for students

Pursuant to …;

On credit for 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,

DECISION:

- Relending agency: Vietnam Development Bank (VDB).

The credit policy for students is implemented to support financially disadvantaged students, contributing to covering their educational and living expenses during their study period at school, including tuition fees; costs for purchasing textbooks, learning materials, food, accommodation, and transportation.

Article 2. Borrowers:

Students from financially disadvantaged backgrounds studying at universities (or equivalent), colleges, vocational schools, and vocational training institutions established and operating under Vietnamese law, including:

1. Orphans who have lost both parents or those who have lost one parent and whose remaining parent is unable to work.

- Poor households according to the legal standards.

- Households with an average per capita income not exceeding 150% of the average per capita income of poor households according to legal standards.

3. Students whose families face financial difficulties due to accidents, illness, natural disasters, fires, or epidemics during their study period, confirmed by the People's Committee of the locality where they reside.

Article 3. Loan Methods:

1. Loans for students are provided through their households. The household representative is the direct borrower and is responsible for repaying the Vietnam Social Policy Bank. In cases where students are orphans who have lost both parents or have lost one parent but whose remaining parent is unable to work, they may directly borrow from the Vietnam Social Policy Bank located near their school.

2. The Vietnam Social Policy Bank shall implement loans for students.

Article 4. Loan Conditions:

1. Students must be residing legally within the borrowing locality and meet the criteria set forth in Article 2 of this Decision.

2. For first-year students, they must have an admission notice or confirmation of enrollment from the school.

3. For second-year and subsequent students, they must have a confirmation from the school that they are currently enrolled and have not been administratively punished for behaviors such as gambling, drug addiction, theft, or smuggling.

Article 5. Loan Amounts:

1. The maximum loan amount is 800,000 VND per month per student.

3. When state tuition policies change or living costs fluctuate, the Vietnam Social Policy Bank will coordinate with the Minister of Finance to submit to the Prime Minister for consideration and decision on adjusting the loan amounts.

Article 6. Loan Period:

1. The loan period is the duration from when the borrower begins receiving the loan until the full repayment of principal and interest as stipulated in the credit contract. The loan period 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 with retained academic standing. The disbursement period is divided into disbursement periods as determined by the Vietnam Social Policy Bank or agreed upon with the borrower.

3. The repayment period is the time from when the borrower makes the first repayment until all principal and interest are fully paid off. For programs lasting up to one year, the maximum repayment period is twice the disbursement period; for other programs, the maximum repayment period is equal to the disbursement period. The repayment period is divided into repayment periods as determined by the Vietnam Social Policy Bank.

Article 7. Interest rate for loans:

1. The preferential interest rate for students is 0.5%/month.

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

Article 8. Loan application documents, procedures, and repayment procedures:

The Social Policy Bank shall stipulate loan application documents, procedures, and repayment procedures to ensure simplicity, clarity, and ease of implementation.

Article 9. Repayment of principal and interest on loans:

1. Within the period from when the loan funds are disbursed until the borrower must repay the principal and interest, interest on the loan will be calculated from the date the borrower receives the first loan installment to the date all principal is repaid.

3. The amount of each repayment shall be guided by the Social Policy Bank and agreed upon in the credit contract.

In cases where borrowers repay the loan ahead of schedule as committed in the credit contract, the interest rate payable will be reduced. The Social Policy Bank shall specify the level of interest rate reduction for early repayment.

Article 11. Adjustment of repayment terms, extension of repayment, and conversion to overdue debt:

1. At the final repayment deadline, if the borrower has difficulty repaying the debt, they must submit a written request for an extension, which will be considered by the Social Policy Bank for the borrower; the maximum extension period shall be half of the original repayment term.

2. If the borrower fails to repay the debt according to the final repayment term and is not granted an extension, the Social Policy Bank will convert the debt to overdue status. The Social Policy Bank will cooperate with local authorities and social organizations to take measures to recover the debt.

3. The Social Policy Bank shall specify the procedures for adjusting repayment terms, extending repayment, and converting 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 Social Policy Bank.

Article 13. Responsibilities of agencies:

1. The Ministry of Finance shall lead and coordinate with the Ministry of Planning and Investment to allocate state capital for student loans and to cover the difference in interest rates and management fees so that the Social Policy Bank can effectively implement student loan programs.

2. The Ministry of Education and Training, the Ministry of Labor, Invalids and Social Affairs, and other relevant ministries and sectors:

a) Direct universities, colleges, vocational schools under their management to cooperate with local People's Committees and the Social Policy Bank to implement student credit policies.

3. Provincial and municipal People's Committees directly under the Central Government: direct competent agencies and local People's Committees at all levels to implement student credit policies in accordance with the law and this Decision.

4. The Social Policy Bank is responsible for guiding loan application documents, procedures, repayment terms, repayment amounts, extensions, and conversions to overdue debt for students in accordance with regulations. Organize fundraising to supplement sources of capital for student loans. Closely and regularly coordinate with universities, colleges, vocational schools, and training institutions during the loan process to ensure that loan funds are used for their intended purpose and facilitate students' access to loan funds and payment of tuition fees.

5. Organizations and individuals employing students who have received state loans in accordance with this Decision are responsible for urging students to transfer money to their families for debt repayment or to directly repay the Social Policy Bank.

Article 14. Handling of violations:

Organizations and individuals that fail to comply with the regulations on credit for students and trainees as stipulated in this Decision shall be handled according to the level of violation in accordance with the provisions of the law.

Article 15. Implementation clauses:

1. This Decision takes effect from October 1, 2007, and replaces Decision No. 107/2006/QĐ-TTg dated May 18, 2006, of the Government Chairman regarding credit for students and trainees. Borrowers who have been granted loans under Decision No. 107/2006/QĐ-TTg dated May 18, 2006, shall continue to be eligible for loans in accordance with this Decision.

2. The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of provincial People's Committees under central cities, Chairmen of the Management Councils, and General Directors of the Social Policy Bank shall be responsible for implementing this Decision.