Vietnam: What are the regulations of Decision 05/2022/QD-TTg on repayment of principal and interest when applying for student loans?
Conditions to get student loans
Pursuant to Article 4 of Decision 157/2007/QD-TTg of Vietnam on credit for students promulgated by the Prime Minister on loan conditions specifically as follows:
Article 4. Conditions for student loans:
1. Students who are living in households lawfully residing in the locality where the loan is granted meets the criteria specified in Article 2 of this Decision.
2. For students, first-year students must have a certificate of admission or a certificate of admission from the school.
3. For students from the second year onward must have a confirmation from the school that they are studying at the school and have not been administratively sanctioned or more for the following acts: gambling, drug addiction, theft stealing, smuggling.
Loan levels when making student loans
Previously, in Article 5 of Decision 157/2007/QD-TTg of Vietnam on credit for students issued by the Prime Minister (Clause 1 of this Article is amended by Article 1 of Decision 1656/QD-TTg in 2019), the loan levels when applying student loans are 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: Maximum loan 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 growth of the Bank for Social Policies' credit plan that has been assigned annually by the Prime Minister of Vietnam; self-balancing capital sources from now until 2020 in the 2016-2020 medium-term public investment plan approved by the competent authority.
Thus, in Decision 157/2007/QD-TTg, the maximum loan amount is VND 2,500,000/month/student.
However, according to the latest regulation, Decision 05/2022/QD-TTg amending Decision 157/2007/QD-TTg on credit for students promulgated by the Prime Minister on the loan levels when applying student loans, specifically 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 VND 4,000,000 /month/student."
Instead of the maximum monthly loan amount for each student VND 2,500,000, according to the latest regulations, the maximum monthly loan amount for students has been increased to VND 4,000,000/month/student.
Applying for student loans
Repaying principal and interest when making student loans
In Article 9 of Decision 157/2007/QD-TTg of Vietnam on credit for students promulgated by the Prime Minister, the regulations on repayment of principal and interest are as follows:
Article 9. Repayment of principal and interest:
1. During the loan disbursement period, the borrower has not yet paid the principal and interest; Loan interest is calculated from the date the borrower receives the first loan to the date the principal is paid off.
2. Borrowers must repay the loan principal and interest for the first time right after the student has a job and earns income but within 12 months from the date the student finishes the course. .
3. The level of debt repayment each time is guided by the Bank for Social Policies and agreed in the credit contract.
According to Decision 05/2022/QD-TTg of Vietnam amending Decision 157/2007/QD-TTg on credit for students issued by the Prime Minister with amendments to Clause 2, Article 9 of Decision 157/2007 /QD-TTg specifically 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:
...
3. Amendment to Clause 2, Article 9:
"From the date the student completes the 12-month course as prescribed, the borrower must repay the loan principal and interest for the first time. Borrowers can repay their loans early without paying interest on early repayment."
Thus, compared with Decision 157/2007/QD-TTg, Decision 05/2022/QD-TTg has changed. If Decision 157/2007/QD-TTg stipulates that the borrowers must repay the loan principal and interest as soon as the student has a job and earns income but not more than 12 months from the date of study. When students finish the course, Decision 05/2022/QD-TTg stipulates that the borrowers must pay the loan principal and interest after 12 months after the completion of the course.
Above are some regulations on student loans that we provide to you. Best regards!
Thư Viện Pháp Luật
