Taipei, Premier Lai Ching-te (???) Thursday agreed to new relaxed rules on student loans to go into effect next month, according to Executive Yuan spokesperson Kolas Yotaka (???.???).
Lai made the decision after being briefed by officials from the Ministry of Education at a weekly Cabinet meeting, Kolas said.
As a result, the existing one-year grace period during which borrowers are required to make only interest payments, can now be extended for up to four years, Kolas said.
During the interest payment period, borrowers will pay a maximum interest rate of 1.15 percent for one to four years depending on the terms they are given, without being obliged to repay the principal, she explained.
The measure is expected to benefit about 90,000 students each year and a total of 500,000 are likely to benefit over the next nine years, Kolas said.
Under the new measure, a private college student who borrows NT$600,000 for four years of school related expenses will make monthly interest payments of NT$575 during a repayment period of eight years, compared with the current monthly principal and interest payment of NT$6,545 (US$214), according to the Education ministry.
The ministry also relaxed the rules for "deferment period" applicants, under which provision borrowers with a monthly income of less than NT$35,000 (US$1,140) -- the previous threshold was NT$30,000 -- can apply for an interim measure whereby they are not required to pay any interest or principal for a period of one to four years.
According to the ministry, 40,000 students are already covered by the measure, and an additional 38,000 are likely to benefit from the relaxed rule.
Vice Minister of Education Yao Leeh-ter (???) said it is estimated the new measures will cost NT$600 million in the first year, with the figure peaking at NT$1.54 billion in the ninth year before dropping to NT$1.29 billion annually from the 12th year as a result of the falling birth rate.
Source: Focus Taiwan News Channel