25 October 2016
About HK$21 million in course reservation fees and tuition fee down payments were confiscated by self-funded tertiary education institutions in the 2015/16 academic year. Photo: HKEJ
About HK$21 million in course reservation fees and tuition fee down payments were confiscated by self-funded tertiary education institutions in the 2015/16 academic year. Photo: HKEJ

Don’t let our students get shortchanged

Back in 2000, then chief executive Tung Chee-hwa announced his ambitious 10-year plan to let 60 percent of high school graduates have the chance to receive a tertiary education, to help develop a knowledge-based economy.

Since then, our city has witnessed a staggering boom in the numbers of self-funded tertiary education institutions that provide a wide variety of higher education program ranging from associate degrees and higher diplomas to undergraduate degrees.

Because there is a huge demand for post-secondary degrees, higher education has turned out to be a highly lucrative business.

As a result, there has been a stampede in the higher education sector to open self-funded and profit-driven educational institutions that provide post-secondary courses for a big price tag.

To maximize their profits, these institutions often charge expensive “reservation fees” for popular courses and require applicants to make a huge down payment in tuition fees for the courses in which they want to enrol.

Worse still, these payments are often non-refundable, even if the applicants eventually don’t enrol in these courses.

Many of those who didn’t get their money back felt they had been shortchanged.

Over the years, there have been calls to address the issue of fee refunds.

Although many institutions have argued that it is necessary for them to charge reservation fees and require applicants to pay up front, so as to maintain a healthy cash flow, many students and parents complain it is unfair that they couldn’t get refunds even if they didn’t enrol in the courses they had applied for.

I believe self-funded institutions need to strike a reasonable balance between their profits and the interests of students.

For example, in March this year, I received a call for help from a student and his parents.

The parents said that when their son was admitted to a post-secondary course offered by one of these self-funded institutions, they were asked to pay a total of HK$30,000 as a reservation charge and down payment for tuition fees for the first semester, which they did.

However, their son later switched to another institution and got admitted through direct application.

When they wanted their HK$30,000 back from the first school, their demand was turned down, despite the fact that the course wasn’t to begin until six months later.

In other words, they paid HK$30,000 for absolutely nothing.

Figures provided by the Education Bureau show the amount of reservation fees charged by self-funded institutions in the 2015/16 academic year totaled HK$18.99 million (US$2.45 million), and the overwhelming majority of those who paid these fees didn’t enrol in the course in the end.

On top of that, a total of HK$1.94 million in down payment for tuition fees was “confiscated” by these institutions, which means students who had been admitted to these institutions either changed their mind or failed to show up for lectures, and therefore they couldn’t get their money back.

We are talking about almost HK$21 million in just one academic year, and it is a lot of money.

Something has to be done about that.

Luckily, the calls to address this issue were finally answered by the government in May.

Under new measures, from this year on, self-funded institutions cannot charge any reservation fees until the day after the announcement of results by the Joint University Programs Admissions System (JUPAS), so that students do not have to make hasty decisions before they know their exam grades.

Also, the amount of reservation fees is capped at HK$5,000.

The Hospital Authority has also agreed that from this year onward, it will announce the admission results for the higher diploma course in nursing studies it offers on the same day as the announcement of the JUPAS results.

However, the new arrangements still haven’t addressed the issue of refunding reservation fees for courses provided by self-funded institutions.

I will follow up closely on this issue and won’t leave the Education Bureau alone until it agrees to fix the problem.

This article appeared in the Hong Kong Economic Journal on June 16.

Translation by Alan Lee

[Chinese version 中文版]

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Legislative Council member from the education sector

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