Consequences of Default

• Further Extension of Interest-free Deferral of Student Loan Repayment

  The Finance Committee of the Legislative Council has approved to further extend the current interest-free deferral of student loan repayment for one year from 1 April 2024 until 31 March 2025. Please click here to learn more.

• Loan borrowers who have failed to repay two or more consecutive quarterly instalments / six or more consecutive monthly instalments without the SFO’s approval for deferment of loan repayment are considered as defaulters.

• Failure to repay loan instalments by the due dates will result in surcharge (for loans under TSFS and FASP) / overdue interest (for non-means-tested loans).

• The SFO reserves the right to withhold processing applications for or the disbursement of new student financial assistance / loan to defaulters.

• The SFO will issue reminders to the defaulter and his / her indemnifier(s) requesting them to settle the overdue loan instalments by a specified date. Defaulters and their indemnifiers may also receive the SFO’s short messaging services and phone calls, urging them to settle the arrears.

• If no payment or response is received from the defaulter and his / her indemnifier(s), the SFO may initiate legal proceedings against them for the recovery of the full amount of the outstanding loan together with interest and / or surcharge and / or overdue interest and / or administrative fee (if applicable) and any recovery costs (including legal costs and related expenses incurred in the course of legal recovery actions) in one lump sum without further notice.