VietNamNet Bridge – A bank loan was the only way Thong Thanh Le's parents were able to send their three children to university even though they had spent their working years saving every dong they could from selling rice.

Parents go through procedures to borrow low-interest bank loans for students at the Viet Nam Bank for Social Policies in Hoai An District in Binh Dinh Province. (Photo: VNS)

The 22-year-old recently graduated from the mathematics faculty at the Da Lat Teachers' Training University. He has taken a position at a secondary boarding school for ethnic minority children in the central province of Binh Thuan.

"My life would be very different today if my parents had not received bank loans for my studies," he said.

Under the national credit programme for poor students, the Viet Nam Bank for Social Policies has provided a total of VND30 trillion (US$1.4 billion) in loans to over 2 million poor students over the past three years.

The majority of those eligible to borrow money are orphans, from poor households, or facing financial difficulties as a result of accidents, natural disasters or pandemics.

The bank's deputy director Nguyen Van Ly said more than VND5 trillion ($238 million) had been set aside for student loans in the first semester of the 2011-12 school year.

Beginning this school year, the programme also began allowing demobilised soldiers-turned-students and poor rural students to take out loans for vocational training.

Under a Prime Minister decision which took effect on August 1, students may take out a maximum credit of VND1 million ($47) per month, up from VND900,000 ($42) previously, while the monthly interest rate was also increased to 0.65 per cent from the previous 0.5 per cent.

Ly said adjustments were necessary for both sides as they would facilitate more support for poor students, share in Government losses from compensating the programme and help more people access student loans.

The bank will also grant preferential policies to those capable of repaying their debts prior to the due date. Ly said families would not be required to pay any interest if they could clear their debts before they're due.

The Viet Nam Bank for Social Policies has also been considering a proposal to include households with an income of less than VND1 million ($47) per person per month, he said.

A recent survey conducted by the bank found out that more than 80 per cent of households across the country belonged to this income group.

They are currently ineligible for the loan scheme as they fall above the poverty line which has been defined as a monthly income per person of VND400,000 ($19.5) in rural areas and VND500,000 ($24) in urban areas.

But the survey revealed that a family with two children attending university would have to pay about VND2.5 million ($119) per month in school fees.

At this rate, a family of four with a monthly average income of VND3 million ($142) would only haveVND670,000 ( $33) left each month to spend on basic needs such as food and clothes after paying school fees for one child to attend school.

Currently there are about 218,000 households with two university-age children who have not benefited from the student loan programme, according to the bank.

Local authorities in cities and provinces have requested the Government to allow these households to take out bank loans to help their students attend school.

Ly said the bank would present the issue to the Government within this month before a final decision could be made.

The national credit programme for poor students has helped many students resume their studies after Government decision No 157/2007 was enacted in 2007.

VietNamNet/Viet Nam News