6.1 While improvements have been made to the Financial Assistance Scheme for Post-secondary Students (FASP) starting from the 2006/07 academic year, students have requested further relaxation of FASP to relieve their financial burden. This Chapter takes stock of the existing financial assistance schemes available to self-financing post-secondary students and discusses the case and options for further improving student finance under FASP.
Background
6.2 FASP was introduced in 2001 for full-time students pursuing locally-accredited, self-financing post-secondary programmes leading to a sub-degree or higher qualification. Eligible students will be provided with means-tested assistance (grant or loan) to meet tuition fees, the level of which is subject to price adjustment in accordance with the movement of the Consumer Price Index (A) and capped at $56,560 for the 2006/07 academic year. Local students aged 25 or below without a sub-degree or higher qualification are eligible to apply. They may also apply for non-means-tested loans under the Non-means-tested Loan Scheme for Post-secondary Students (NLSPS) to cover tuition fees (after deducting the actual amount of means-tested assistance, if any) and living expenses.
6.3 Prior to the improvements in 2006, only the most needy students who passed the means test and eligible for 100% assistance would be provided with full grant, and those who passed the means test but not eligible for 100% assistance would receive no grant at all. Instead, they would be provided with a partial means-tested loan to cover tuition fees.
6.4 Since the release of the Phase 1 Review Report, the Government has, with effect from the 2006/07 academic year, brought the means-tested grants under FASP on par with those under the Tertiary Student Finance Scheme – Publicly-funded Programmes (TSFS)15 by
15 TSFS provides means-tested financial assistance to needy full-time students undertaking an exclusively UGC or publicly-funded student place of a recognized course at the eight UGC-funded institutions or the Hong Kong Institute of Vocational Education, the Prince Philip Dental Hospital and
applying the same sliding scale16 for determining the grant level. In other words, eligible students who do not pass the means test for full grant may receive partial grants according to the sliding scale. The Government has also expanded the scope of FASP to provide a grant of up to about $3,000 for academic expenses per student per annum. We estimate that means-tested grants disbursed under FASP would increase from $215 million in the 2005/06 academic year to about $537 million in the 2006/07 academic year, benefiting about 18,000 students.
Discussion and Recommendations
6.5 Notwithstanding the above improvements, self-financing post-secondary students demanded further improvements to FASP to -
(a) provide means-tested loans (under FASP) to cover their living expenses; and
(b) extend FASP to cover sub-degree graduates pursuing self-financing “top-up” studies.
(a) Means-tested Loans to Cover Living Expenses
6.6 Unlike their counterparts under TSFS, students of self-financing programmes are not eligible for means-tested loans to cover their living expenses. They may however borrow non-means-tested loans which are offered on a no-gain-no-loss and full cost recovery basis, with the current interest rate pitched at 5.132% per annum.
6.7 To strengthen our support to needy students of self-financing programmes, we consider that there may be a case, subject to funding availability, to provide means-tested loans (currently at an interest rate at 2.5%) to these students to cover their living expenses, on the same terms and conditions for means-tested loans provided under TSFS17. We believe that this proposal would bring further financial relief to students studying self-financing programmes. Details of the proposal, including funding availability and timing of implementation, will be
16 Under the TSFS, the level of assistance is determined by a 17-level (from 100% to 4% to the grant ceiling) sliding scale.
considered by the Government separately.
Recommendation 13: Subject to the availability of resources, we recommend that the Government should consider providing means-tested loans for living expenses under the Financial Assistance Scheme for Post-secondary Students to bring further financial relief to students studying self-financing sub-degree programmes.
(b) Extending FASP to cover students pursuing self-financing top-up degree programmes
6.8 Although sub-degree graduates normally prefer to further their studies at the UGC-funded institutions, there is, realistically, a limit to which the Government (and for that matter the institutions themselves) can expand the number of senior year places in publicly-funded institutions within a short period of time. We consider that the self-financing sector can play a pivotal role in meeting the articulation aspirations of a good portion of the sub-degree graduates.
6.9 However, at present students who wish to “top-up” their studies in locally-accredited self-financing degrees programmes are not eligible for financial assistance under FASP if they have obtained any qualifications at sub-degree level or above (as opposed to those taking up publicly-funded senior year places in UGC-funded institutions who will be eligible for TSFS). They may, instead, apply for non-means-tested loans under NLSPS to cover tuition fees of top-up studies. To better support this group of students, we recommend that consideration be given to providing student finance to eligible sub-degree graduates studying self-financing full-time top-up degree programmes. The proposal would also be conducive to the development of a self-financing degree sector in Hong Kong. However, given the “non-cash-limiting” nature of student finance schemes (i.e. assistance at the prescribed level would be provided to all applicants meeting the eligibility criteria irrespective of the number of such applicants), the proposal of extending FASP to cover top-up studies would have significant financial implications. Moreover, having regard to the experience in developing the self-financing sub-degree sector and to ensure that public resources are dedicated to supporting meritorious sub-degree graduates pursuing quality top-up studies, we
consider it imperative to put in place measures to uphold the quality and standards of the self-financing degree programmes if FASP is to be extended.
6.10 We consider that, as a matter of principle, any possible relaxation or extension of FASP should be made available to eligible students who pursue full-time locally-accredited self-financing top-up studies after they have successfully completed a full-time locally-accredited sub-degree programme. In line with this principle and subject to funding availability, we recommend that the Government should consider extending the FASP to cover sub-degree graduates pursuing:
(i) self-financing degree / top-up degree programmes that have been accredited in Hong Kong by a government-recognised accreditation agency (e.g. by the HKCAAVQ); or
(ii) self-financing degree / top-up degree programmes operated by the self-accrediting institutions with the resulting qualifications awarded solely or jointly by such institutions.
6.11 In other words, students of non-local degree programmes operated by a non-local institution alone (or through a local partner) or jointly with a local institution18 and leading to a non-local qualification would not be eligible for student finance under the extended FASP as these programmes have not been accredited locally. However, if a non-local programme is accredited by a government-recognised accreditation agency, or have gone through the QA mechanism and procedures of the local self-accrediting institution concerned with the resulting qualification awarded by such institution, the programme concerned would fall within the proposed ambit of the extended FASP.
6.12 Our proposal will likely encourage non-local institutions to seek accreditation locally for their non-local degree (and top-up degree) programmes (if they are operated independently or with a local non-self-accrediting institution) in order that their students could be
18 These programmes are currently registered, or exempted from registration, under the Non-local
eligible for the extended FASP. For programmes operated jointly by a non-local institution and a self-accrediting institution in Hong Kong, the proposal may also encourage them to undergo the internal QA procedures adopted by the institution proper or by an external accreditation agency.
We believe that the proposal would help enhance the overall quality of non-local degree programmes offered in Hong Kong, without changing the fundamentals of the existing regulatory regime which is based on registration/exemption (see also paragraphs 8.14-8.16 below).
6.13 To ensure the healthy and sustainable development of the self-financing degree sector, we must, in parallel with the recommendation to extend FASP, put in place robust measures to ensure the quality of self-financing degree programmes provided in Hong Kong.
The requirement for local accreditation is geared towards this objective.
In addition, given the number and diversity of the course providers involved in providing self-financing degree programmes, we recommend that the parties concerned, in particular the QA agencies for degree programmes, should jointly discuss QA issues pertaining to the self-financing degree sector. Details are discussed in Chapter 7 (paragraph 7.23).
6.14 We acknowledge that the recommendation to extend FASP to cover self-financing top-up studies will have very significant resources implications for the Government, and that the Government will have to examine very carefully all relevant policy and financial implications arising from the recommendation before deciding on the way forward.
Recommendation 14: Subject to the availability of resources and the proposed parameters, we recommend that the Government should consider extending the Financial Assistance Scheme for Post-secondary Students to cover sub-degree graduates pursuing self-financing full-time locally-accredited degree and top-up degree studies in Hong Kong.
Other Requests
(a) Providing financial assistance to sub-degree graduates pursuing full-time degree programmes outside Hong Kong
6.15 There have been suggestions that student finance should be extended to support sub-degree graduates to pursue full-time degree programmes outside Hong Kong so as to expand their articulation opportunities. We do not recommend this option for three reasons.
First, given the number and diversity of overseas degree programmes, we have difficulty in ensuring that Hong Kong students are pursuing programmes whose quality and standard are comparable to those of our local degree programmes. Secondly, given the resource constraints, we believe that priority should be given to providing financial assistance to students pursuing degrees locally, and that the gradual development of a local self-financing degree sector would provide more articulation places to meet the aspirations of our sub-degree graduates. Thirdly, it would be difficult to ring-fence why financial assistance is provided to sub-degree graduates pursuing overseas top-up degree programmes only, but not those undertaking full three-year or four-year undergraduate programmes outside Hong Kong. Indeed, we note that the suggestion of extending student finance to cover programmes outside Hong Kong has not commanded general support among the sub-degree students, who prefer pursuing top-up studies in Hong Kong as the tuition fees and living expenses here are generally lower.
6.16 A related issue is whether the Government should extend financial assistance to support Hong Kong students undertaking degree programmes offered by our UGC-funded institutions (and for that matter other locally-accredited institutions) outside Hong Kong (e.g. in the Mainland). While this development may be complementary to our efforts to increase articulation opportunities for local students, we consider that insofar as the current Review is concerned, the Government’s first priority should be to assist local sub-degree graduates to articulate locally.
CHAPTER 7: EMPLOYMENT AND ARTICULATION