Vietnam: From May 19, 2022, the maximum student loan according to the latest regulations is up to VND 4 million/month?
What is student loan?
Pursuant to Article 1 of Decision 157/2007/QD-TTg of Vietnam on credit for students on student loan policy specify as follows:
"Article 1. Scope of application:
The credit policy for students is applied to support students with difficult circumstances, contributing to cover the costs of studying and living of students during the school year. Attendance at the school includes: tuition fees; expenses for books, learning facilities, meals, accommodation and transportation costs."
Who are eligible for student loans?
According to Article 2 of Decision 157/2007/QD-TTg of Vietnam and Clause 1 Article 1 of Decision 05/2022/QD-TTg of Vietnam on credit for students promulgated by the Prime Minister as follows:
Students with difficult circumstances study at universities (or university equivalents), colleges, professional intermediate and at vocational training institutions established and operating under the provisions of the Vietnamese law, including:
(1) A student or student who has lost both parents or has lost only one parent but the other is unable to work.
(2) Students who are members of a household belonging to one of the following categories:
- Poor households according to the standards prescribed by law;
- Near-poor households according to the standards prescribed by law;
- Households have an average standard of living according to the standards prescribed by law.
Apply for student loans
What is the maximum student loan?
According to Clause 1 Article 5 of Decision 157/2007/QD-TTg of Vietnam on credit for students (amended by Article 1 of Decision 1656/QD-TTg in 2019), the maximum student loan are defined as follows:
"Article 1. Adjustment of loan levels specified in Clause 1, Article 5 of Decision No. 157/2007/QD-TTg dated September 27, 2007 of the Prime Minister on credit for students as follows: The maximum loan amount is 2,500,000 VND/month/student.
- The Ministry of Planning and Investment and the Ministry of Finance shall request competent authorities to balance and allocate loan capital, interest rate differential funding and management fees to the Bank for Social Policies to implement the Program after 2020 as prescribed by law.
- The Bank for Social Policies is responsible for lending, supervising and recovering debts in accordance with the provisions of current law, within the scope of the credit growth plan of the Bank for Social Policies approved by the Prime Minister. Government annual delivery; self-balancing capital sources from now until 2020 in the 2016-2020 medium-term public investment plan approved by the competent authority."
However, according to the provisions of Clause 2 Article 1 of Decision 05/2022/QD-TTg of Vietnam (effective from May 19, 2022), the maximum amount of capital that students can borrow is as follows:
"Article 1: Amending and supplementing a number of articles of the Prime Minister's Decision No. 157/2007/QD-TTg dated September 27, 2007 on credit for students as follows:
...
2. Amendment to Clause 1, Article 5:
"1. The maximum loan amount is 4,000,000 VND/month/student"
Thus, from May 19, 2022, eligible students for loan support will be able to borrow a maximum of 4 million VND/month/student.
Time limit for student loan?
Pursuant to Clause 3 Section I Guidance 2162A/NHCS-TD of Vietnam in 2007 guiding the specific student loan term as follows:
"I. SOME CONTENTS ARE UNDERSTOOD AND IMPLEMENTED UNIFORMLY IN THE MANUAL
...
3. Loan term:
3.1. Loan term: is the period from the date the borrower receives the first loan to the date of repayment of principal and interest as agreed in the Debt Acceptance Agreement.
The loan term includes the loan disbursement period and the debt repayment term.
a. Loan disbursement period: The period from the date the borrower receives the first loan to the date the student or student (hereinafter referred to as HSSV) finishes the course, including the time when students are allowed to leave school for a definite period and have their learning results preserved (if any).
During the loan disbursement period, the borrower has not yet had to pay the loan principal and interest; Loan interest is calculated from the date the borrower receives the first loan to the date the principal is paid off.
b. Debt repayment period: The period from the date the borrower pays the first loan to the date of paying off the principal and interest. The borrower and the bank agree on a specific repayment term but not exceeding the maximum repayment term specified as follows:
- For training programs with a training period of up to one year, the maximum repayment period is equal to twice the loan disbursement period.
- For training programs over one year, the maximum repayment period is equal to the loan disbursement period.
3.2. In case a household borrows money for many students at the same time, but the graduation term of each student is different, the loan term is determined according to the student who has the longest time to attend the school.
Decision 05/2022/QD-TTg officially took effect from May 19, 2022.
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