Hungary: Student Loan Company signs deal with EIB
Student Loan Company Zrt contracted European Investment Bank (EIB) for a €150 million ($204.5 million) credit line to optimize its resources, said director Tamás Csillag.
Pay-off term of the credit contract is 15 years, with a 5 year moratorium to pay-off capital. The first and only organization to receive a credit from European Investment Bank to finance student loans, Student Loan Company Zrt had contracted for €100 million in May 2005, the amount was fully called. With the Ft 24.4 billion ($129.8 million) made available for the 2006/07 school year, the total loan provided for the students since Student Loan Company was founded five years ago, reached Ft 131.1 billion ($704 million).
The center is not expecting increases in the number of customers (234,161 students in 2006/07), as the total number of students is decreasing. Interest rate has remained unchanged. Last year it was decreased from 10.22% to 9.5%, and this rate is guaranteed until the end of 2007. Interest rate is being calculated cumulatively from source cost, operative cost and risk target asset, the latter component at present is 1.61%. In the 2006/07 school year the company received Ft 9.62 billion including advance payment, compared to the expected Ft 5.178 billion.
Maximum monthly amount callable has remained unchanged: Ft 30,000 for state subsidized, and Ft 40,000 for non subsidized education. The student loan company is to issue bonds: Ft 25 billion 1-year-bonds are being issued in September. This is to optimize the structure of loans. The loans made available for the 2006/07 school year (totaling at Ft 137.5 billion) came from the Hungarian Development Bank (MFB) 36%, EIB 14%, and bonds 48%, while the rest came from commercial banks. 27% of students received a loan in the last 5 years, the average amount was Ft 257,000. (Gazdasági Rádió)
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