Decision No. 219/1998/QĐ-NHNN1 Regarding the issuance of "Credit Rules for High School, College, University Students and Vocational Training Students"

Pursuant to …;

Regarding the issuance of "Credit Regulations for Students at Universities, Colleges, Vocational High Schools, and Technical Training Schools"

Credit Regulations for Students at Universities, Colleges, Vocational High Schools, and Technical Training Schools

GOVERNOR OF THE STATE BANK OF VIETNAM

Pursuant to the State Bank Law dated May 23, 1990;

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

BASED ON DECREE NO. 15/CP dated March 2, 1993 of the Government on the tasks, powers, and responsibilities for state management of ministries and ministerial-level agencies;

At the proposal of the Director of the Economic Research Department,

Pursuant to …;

Article 1.- The attached Decision promulgates "Credit Regulations for Students at Universities, Colleges, Vocational High Schools, and Technical Training Schools".

Article 2.- This Decision shall take effect fifteen days from the date of signature, superseding Decision No. 40/1997/QĐ-NHNN1 dated December 5, 1997 of the Governor of the State Bank on the issuance of Credit Regulations for Students at Universities, Colleges, Vocational High Schools, and Technical Training Schools.

Article 3.- The Chairman of the Board of Directors, General Directors, and Directors of commercial banks assigned by the Governor of the State Bank to provide loans to students are responsible for organizing the implementation of this Decision.

Heads of relevant units at the Central State Bank, Branch Directors of the State Bank in provinces and cities are responsible for enforcing this Decision.

CREDIT REGULATIONS FOR STUDENTS AT UNIVERSITIES, COLLEGES, VOCATIONAL HIGH SCHOOLS, AND TECHNICAL TRAINING SCHOOLS
(Issued together with Decision No. 219/1998/QĐ-NHNN1 dated July 1, 1998 of the Governor of the State Bank)

These regulations stipulate the provision of loans by commercial banks assigned by the Governor of the State Bank (hereinafter referred to as the Bank) to lend money from the Education Loan Fund established pursuant to Decision No. 51/1998/QĐ-TTg of the Prime Minister to students at universities, colleges, vocational high schools, and technical training schools (hereinafter referred to as students).
Borrowers:

I. GENERAL PROVISIONS

Article 1. Borrowers are children of families facing financial difficulties who are enrolled in full-time long-term programs at universities, colleges, vocational high schools, and technical training schools, falling under one of the following categories:

Article 2. 1. Students who have their permanent residence in rural areas or difficult regions before entering school and can borrow funds after enrollment and continue borrowing in subsequent years if they consistently maintain a cumulative grade point average classified as satisfactory or higher.

2. First-year students whose total entrance exam scores are classified as good or higher compared to the admission threshold (as determined by the school), and can continue borrowing in subsequent years if they meet the criteria set forth in Point 3 of this Article.

3. Students who consistently maintain a cumulative grade point average classified as satisfactory-good or higher (for those who have been studying for one semester or more).

4. Students from families within the policy category (as defined by the State) who, despite not meeting the academic standards specified above, may still borrow funds upon confirmation and recommendation by the school.

Conditions for borrowing:

Belonging to the borrower categories specified in Article 2 of these Regulations.

Article 3. Having a clear address of the family or guardian in Vietnam.

Submitting a loan application.

Students borrowing from the Education Loan Fund are not required to provide collateral for the loan.

Schools are responsible for assisting the bank in monitoring borrowers and the use of borrowed funds by students.

Loan proceeds from the Education Loan Fund are intended to support students in covering part of the costs incurred during their studies at the institution, including:

Article 4. Costs for purchasing textbooks, study materials, and research tools.

III. SPECIFIC PROVISIONS

Article 5. Direct living expenses that serve the educational purpose.

Amount of loan:

The amount of the loan is determined by the General Director or Director of the lending bank in accordance with the borrowing needs of each student and the annual inflation rate, but the maximum amount is 150,000 VND per student per month.

Article 6. Term of the loan:

The maximum term of the loan is ten years, except for graduates who accept employment in rural or difficult regions, which may be extended up to fifteen years. The loan term is based on the duration of study and the ability to repay the debt after graduation. The bank and the borrower agree on the final repayment period and specific installment periods, but the first payment of principal and interest must be made six months after the student starts working and no later than one year after graduation.

Article 7. Maximum interest rate on the loan is fifty percent of the ceiling for short-term loan interest rates or the average general loan interest rate published by the Governor of the State Bank. The specific interest rate is determined by the Governor of the State Bank in consultation with the Minister of Education and Training.

III. LOAN PROCEDURES AND DEBT COLLECTION

Article 8. Application for loan and review process:

1. The loan application must include the following elements:

Article 9. Full name of the borrower, school, class, and program.

Full name and address of the father, mother, or guardian.

Family address.

Request for a loan from the Education Loan Fund.

Commitment of the borrower to repay the loan.

Commitment of the father, mother, or guardian to repay the loan on behalf of the borrower if the borrower cannot repay it.

Confirmation by the People's Committee of the commune, ward, or town where the student had permanent residence prior to enrollment regarding the address and economic hardship of the student's family.

2. Review process for loan applications.

After receiving a properly completed loan application as stipulated in Point 1 of this Article, the applicant sends it to the Student Union (for universities and colleges) or the Ho Chi Minh Communist Youth Union (for other schools). The Student Union or Ho Chi Minh Communist Youth Union is responsible for rechecking the application, and if the applicant meets the borrowing criteria set forth in these Credit Regulations, the Student Union or Ho Chi Minh Communist Youth Union forwards the list along with the loan application of the student to the school. The school is responsible for rechecking and sending the list of eligible students to the bank.

Loan application documents:

Students wishing to apply for a loan must submit the following documents to the bank:

Article 10. Loan application form: Only needs to be submitted once to the bank.

Estimated income and expenditure statement and loan request with school confirmation: Students must submit annually to the bank.

Application for borrowing money: Only needs to be submitted to the bank once initially.

Table of anticipated revenues, expenditures, and requests for borrowing money, confirmed by the school: Students must submit annually to the bank.

Article 11. Based on the list of students proposed by the school to be granted loans by the bank and the loan application documents of the students, the bank and the borrower shall enter into an annual credit contract. The credit contract must include the following elements:

Total amount of loan for the year: To be agreed upon by the bank and the borrower but shall not exceed the limit set by the General Director of the Bank and the provisions of these Regulations.

Method of lending: To be carried out through a regular loan account.

Agreement on disbursement: The issuance of loan funds shall be made in installments according to the student's need for the use of loan funds (monthly or in batches during the year), and shall not be provided as a lump sum based on the total loan amount stipulated in the credit contract.

Agreement on repayment: As specified in Article 12 of these Regulations.

Article 12. Collection of principal and interest:

1. During the period of study at the school, the student does not have to repay the principal.

2. Within no more than 15 days after graduation or upon completion of the study period, the graduate who has borrowed money must come to the lending bank to agree on the method of repaying the principal and interest (direct payment or the bank will notify the employer of the debt). Only after the student presents the bank's confirmation documents regarding the student's commitment to repay the debt, will the school proceed with the procedures for issuing the graduation certificate and job assignment. The bank encourages graduates, in cases where low income prevents timely repayment, the borrower may submit a request for debt extension to the bank for consideration and decision; the maximum extension period shall not exceed two years. During the time the borrower still owes the bank, if there is a change in residence, workplace, or phone number (if applicable), the borrower is responsible for notifying the bank of such changes.

3. Upon maturity of the repayment period, if the student cannot repay the debt, the parent or guardian must repay the debt on behalf of the student as committed in the loan application.

4. In case the student, due to any reason (transfer to another school, dropout, removal from the student list, etc.), no longer studies at the school while having outstanding loans from the bank, the student must fully repay the bank; if the student has not fully repaid, the school has the responsibility to remind the student in writing and facilitate the bank's recovery of the loaned amount.

Interest on the loan is paid together with the principal; interest on the loan is calculated from the date the student finishes the final examination (including cases where the student is not eligible to take the final examination, interest must be calculated from this point), during the period of study at the school, the loan does not accrue interest.

Article 13. Urging the recovery of debts:

In case the borrower fails to repay the debt on time, the urging of debt recovery shall be conducted as follows:

1. The bank has the right to apply measures:

Sending Notification to the authority where the borrower is working, the family, and the local government where the borrower's family resides.

Requesting the authority where the borrower is working, the family, and the local government where the borrower's family resides to urge the borrower to repay the debt.

The authority where the borrower is working, the family, and the local government where the borrower's family resides shall cooperate with the bank to urge the borrower to repay the debt on time upon receiving the bank's notification that the borrower has failed to repay the debt on time, specifically as follows:

Urging the borrower to repay the debt on time, sending Notification to the bank about receiving the bank's Notification, the measures taken to urge repayment, and cooperating with the bank to implement debt collection measures.

If the borrower's family changes residence or the borrower changes workplace, the family or the local government where the borrower's family resides, and the previous authority where the borrower worked shall inform the bank of these changes and the new place of residence of the borrower's family and the new workplace of the borrower.

IV. INSPECTION AND HANDLING OF VIOLATIONS

Article 14. During the process of disbursing loans, the bank is responsible for requiring students to present academic performance documents certified by the school to ensure that the loans are granted to the prescribed recipients.

Article 15. During the management of students, if the school discovers that students misuse the loan funds or are involved in social evils, it must report to the bank. The bank and the school shall discuss and agree on measures to collect the debt ahead of schedule; in case the borrower does not comply, the school and the bank shall take necessary measures against the student and the parents or guardians of the student in fulfilling their responsibility to repay the bank.

Article 16. In case the borrower and the parent or guardian fail to fulfill the loan commitment as agreed, depending on the level of violation, the bank and the school may apply credit sanctions and other legal provisions to handle the situation.

V. IMPLEMENTATION

Article 17. The General Directors and Directors of banks assigned the task of lending to students are responsible for guiding the implementation of these Credit Regulations. Quarterly reports on the loan and debt collection status shall be submitted to the Research Department of the State Bank of Vietnam.

Article 18. Any amendment or supplementation to these Regulations shall be decided by the Governor of the State Bank of Vietnam./.