Kazakh graduates reluctant to repay their student loans

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Having just paid off my own student loan after a mere 11 years (thanks very much UK government for introducing fees the year I enrolled…), I read with interest a report from Kazakhstan’s Tengri News agency on the situation in Kazakhstan. The story by Alisher Akhmetov is reproduced from http://en.tengrinews.kz/finance/Kazakhstan-students-owe-billions-to-the-state-17129/ below. NB – don’t forget that the ‘billions’ referred to relates to Kazakh currency, not USD or GBP!!

Kazakhstan Financial Center is reclaiming the loans issued by the state in 1999-2005 in court, Tengrinews.kz reports citing the press-service of the Financial Center. Back then the educational loans were issued to almost 60 thousand people. Half of them “forgot” to return the money or changed the residency.

The state spent the total of over 15 billion tenge ($100 million) on the program. 1 billion tenge ($6.7 million) has already been lost to the inflation and the remaining 14 million have to be returned. The student loans were issued both in the form of the monthly scholarships and payment of education fees. Many students used both forms of the loans simultaneously. First repayments had to start back in 2004 after the students completed their studies. The debt amount was divided into equal shares spread throughout a certain period: 10 years for scholarships and 15 years for education fee. The students had to pay the money at least twice a year.

As of today around 2.9 billion tenge ($19.3 million) have been returned to the budget: 22 thousand people are paying back their debts in good faith and over 5 thousand have paid back the full amount of their loans. Every week the Financial Center is filing 10 lawsuits against persistent non-payers. Penalties are imposed on the debtors and the cases are being initiated against them. If a former student cannot pay the debt, the money is demanded from his guarantors. Kazakhstan courts have already issued 3,800 rulings on collection of the debts.

According to the Financial Center, the students often complain about insolvency and poor awareness of their financial obligations. Part of the debtors try to conceal the information on their actual place of residency and registration from the organization. “There are cases when the debtors do not want to pay at all (even after the court’s ruling) or start paying only after they receive the request for summons, having understood how serious the situation is,” the press-service writes.

By Alisher Akhmetov

For more information see:http://en.tengrinews.kz/finance/Kazakhstan-students-owe-billions-to-the-state-17129/

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