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KMT's Hou vows to pay student tuition loan interest if elected

12/16/2023 09:04 PM
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Presidential candidate of the opposition Kuomintang Hou Yu-ih (third right) addresses a campaign event in Taipei on Saturday. CNA photo Dec. 16, 2023
Presidential candidate of the opposition Kuomintang Hou Yu-ih (third right) addresses a campaign event in Taipei on Saturday. CNA photo Dec. 16, 2023

Taipei, Dec. 16 (CNA) Hou Yu-ih (侯友宜), presidential candidate of the opposition Kuomintang (KMT), said on Saturday that if elected, his administration will pay tuition loan interest for college students and graduates, to address the heavy financial burden faced by students taking out loans to pursue higher education.

In a statement released by his campaign office, Hou said about 750,000 college students or those who studied a higher degree have signed up for tuition loans with borrowing ranging between NT$200,000 (US$6,396) to NT$600,000 and such loans requiring payment of NT$2,200 to NT$6,000 every month for eight to 14 years.

Citing statistics from the Ministry of Labor, Hou said about 24.2 percent of new graduates receive only the minimum wage, which is set to rise 4.05 percent to NT$27,470 a month, but from that many have to pay rent, water and power bills among other living costs, with tuition loan payments merely adding to the financial burden.

Many tuition loan borrowers come from economically disadvantaged backgrounds or from those which have two or more college students at the same time. In such situations, if they fail to land a job soon after graduating, tuition loan payments can push their family finances into "poverty risks," Hou said.

The pledge to pay tuition loan interest will provide support to the younger generation and give them greater financial flexibility, he added.

In addition, Hou also proposed that the government should relax tuition loan application rules by allowing a college student who comes from a household with less than NT$1.5 million in annual income to apply for tuition loans compared with the current requirement of less than NT$1.2 million.

As the NT$1.2 million household income threshold was introduced in 2007, the rule needs to be adjusted now to better reflect current economic realities, Hou said.

To prevent fraud or an increase in overdue loans under the student tuition loan system, Hou said a mechanism will be established to closely watch borrowers' financial situation in one year after he is sworn in, which will enable the government to extend necessary assistance to the needy.

To help more young people, Hou proposed in October that if elected, his government will raise subsidies each year for tuition and incidental fees for private college students, who pay more than public college students in tuition and incidental fees, from the current NT$35,000 a year to NT$50,000, starting from the 2025-2026 academic year.

In other plans targeting the younger generation, earlier this month Hou laid out a plan allowing people to take out a maximum home loan of NT$15 million from banks and not having to make a down payment when buying a home, making it easier for young people to buy homes.

To be eligible, individuals would have to be under 40 years old, a first-time buyer, have a good credit score, and make an annual income that falls under a fixed amount, which has yet to be announced.

(By Liu Kuan-ting and Frances Huang)

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