Blue Camp Pushes for Interest-Free Student Loans, Calls for Flexible Approach; Bill Referred to Negotiation

By Central News Agency reporter Lin Jing-en, Taipei, January 11

The Legislative Yuan's Education and Culture Committee today reviewed draft amendments to Article 58 of the Senior High School Education Act, Article 35 of the University Act, and Article 44 of the Junior College Act. Democratic Progressive Party (DPP) legislators advocated for fully exempting student loan interest and extending grace periods without mandating these measures into law, urging flexibility to avoid rigid constraints. Kuomintang (KMT) legislators, however, argued that statutory inclusion carries symbolic significance and enhances enforcement commitment. With deep disagreements between the ruling and opposition parties, the proposed amendments were retained and referred to party caucus negotiations.

The three bills, collectively referred to by KMT legislators as the 'student loan trilogy,' aim to alleviate repayment burdens on students and young people.

Regarding the Senior High School Education Act, the KMT caucus proposed that the Ministry of Education fully subsidize student loan interest through budgetary allocations. For the University Act, they demanded that students from households with a net income subject to a tax rate of 12% or less be exempt from tuition fees, with the Ministry of Education covering these costs. In the Junior College Act, they proposed that the government fully subsidize loan interest, and borrowers should begin repaying the principal monthly under an annuity model starting the day after two years from completion of studies, military service, teaching internships, or other qualifying events.

The review began with the Senior High School Education Act. KMT legislator Lo Chih-chiang stated that zero-interest student loans would reduce financial pressure on students and families. He noted that President Lai Ching-te, when serving as a legislator in 2009, had advocated for zero interest rates and a three-year repayment period to allow university students to study without financial stress. The KMT, he added, is going even further and aligning with President Lai's recently announced policies to help youth start their lives with less burden. He also pointed out that due to declining birth rates, fewer students are applying for loans, meaning the Ministry of Education should have sufficient fiscal capacity to assist young people.

DPP legislator Wu Sz-yu stated that her party supports authorizing the Ministry of Education to establish regulations regarding loan conditions, amounts, rights and obligations, and other matters. The DPP has consistently opposed amending laws in a way that unilaterally increases government budget expenditures and infringes on executive authority. She urged the KMT to carefully reconsider: if such measures are to be codified, they should be expressed in principle-based language to allow administrative flexibility and avoid rigid constraints, thereby truly helping students.

Deputy Minister of Education Chu Chun-chang, attending the session, stated that measures such as grace periods and interest subsidies can already be implemented under the current student loan regulations, and urged legislators to reconsider carefully.

As both sides insisted on their respective amendment versions, meeting chair and KMT convener Lo Ting-wei announced that the articles would be retained and referred to negotiation.

Similar disagreements arose during the subsequent reviews of the University Act and Junior College Act. The DPP caucus continued to advocate for principle-based language authorizing executive implementation without mandatory codification, while the KMT maintained that statutory inclusion ensures symbolic commitment and strengthens enforcement motivation.

With no consensus reached between the ruling and opposition parties, all three bills' amendment clauses were retained and referred to party caucus negotiations. (Edited by Su Lung-chi)