Legal Consequences
The Working Family and Student Financial Assistance Agency (the Agency) scrutinises applications in a stringent manner and closely monitors repayment of student loans, so as to ensure the proper use of public funds.
Adopting a zero-tolerance approach to any attempts to deceive financial assistance through providing false information or concealing details, the Agency has established a mechanism to identify and guard against fraudulent cases. Apart from fully recovering overpaid subsidies from applicants, fraudulent cases will also be referred to the law enforcement agencies for follow-up actions. For borrowers and indemnifiers with overdue repayments, where no payment or response is received after reminders, the Agency will initiate legal proceedings to recover, in one lump sum, the full amount of the outstanding loan together with interests, surcharge, administrative fee (if applicable), legal costs and related expenses having regard to the circumstance of each case. The relevant actions may impact on one’s reputation, prospect and professional qualifications.
The cases listed on this page illustrate the severe consequences of obtaining financial assistance by deception and defaulting on loans. Members of the public are urged not to defraud the Agency or default on loan repayments.
To avoid any legal consequences arising from the omission / provision of false information or default on loans, please read the relevant Guidance Notes carefully before completing the application form:
Working Family Allowance Scheme
Student Financial Assistance Schemes
(To view the Guidance Notes for the Student Finance Assistance Schemes, please select the relevant scheme from the link above. After arriving the overview page, under “Category”, select “How to Apply”, then choose “Links, Forms and Download”. The corresponding Guidance Notes are listed on the page.)
Case #1
Understated Income, Faced Criminal Record
When applying for student assistance for his child, the applicant declared that he only worked in one company as a chef and his spouse was a housewife without income.
Through our review mechanism, we requested tax-related supplementary documents and conducted an in-depth investigation. It was found that the applicant was actually employed by multiple companies but concealed the related income, thereby obtaining full level of assistance. The applicant explained that he forgot to report the employment records. After our authentication, we referred the case to the Police for investigation. In the end, the applicant was prosecuted. In addition to repaying the full amount of overpaid subsidies, he had to face legal consequences.
Verdict: The applicant was convicted of fraud under Section 16A of the Theft Ordinance (Cap. 210). He was sentenced to 2 months of imprisonment (suspended for 3 years), fined, and left with a criminal record.
Case #2
Couple Omitted Income, Convicted of Fraud
When applying for student assistance for her two children, the applicant declared that her spouse was a cleaning supervisor, but falsely claimed that she herself was a housewife without income.
Through our review mechanism, we requested tax-related supplementary documents and conducted an in-depth investigation. It was found that the applicant in fact had employment income, which she failed to declare, and therefore obtained full level of assistance. During our investigation, the applicant continued to insist that she had no income, apparently with the intention to mislead our officers. The case was subsequently referred to the Police for investigation. Eventually, both the applicant and her spouse were prosecuted. In addition to repaying the full amount of overpaid subsidies, they had to face legal consequences.
Verdict: Both applicant and her spouse were convicted of fraud under Section 16A of the Theft Ordinance (Cap. 210). Each was sentenced to 60 hours of Community Service Order and left with a criminal record.
Case #3
No Way to Hide from Debt, Bailiff’s Enforcement for Student Loan
A student secured a total of approximately HK$60,000 in student loan to pursue a bachelor's degree for two academic years. Upon completion of the study, the student failed to make repayments according to the original repayment schedule. Despite repeated reminders and demands issued by the Agency to both the student and the indemnifier to settle the arrears, they ignored the reminders and continued to default on the loan. Consequently, the Agency initiated legal proceedings against them at the Small Claims Tribunal to recover the full outstanding loan, together with interests, administrative fee, legal costs, and related expenses. The Court subsequently granted an Order requiring them to settle the outstanding amount in one lump sum, with interest calculated at the judgment rate.
The student and the indemnifier continued to neglect their obligations, despite the Court order and the Agency’s repeated demands for payment. As a result, the Agency took further legal action, and Court Bailiffs attended their premises to execute the Writ of Fieri Facias for the seizure of assets.
Result: The student and the indemnifier made a total of approximately HK$90,000 repayment, covering the judgment debt, interests, administrative fee, legal costs and related expenses. This final amount was 35% higher than the amount required under the original repayment arrangement. Case information also became public alongside the judgment.
Case #4
From Graduation to Litigation – The Escalated Costs of Ignoring Student Loan
A student undertook two student loans with total principal amount over HK$200,000 for pursuing tertiary education for five academic years, with a repayment period of 15 years upon graduation and the monthly repayment amount of around HK$1,000. With genuine financial hardship, the student applied for deferred repayment on two occasions and both were approved by the Agency. Ultimately the student still failed to fulfil the obligation for repaying the two student loans. The Agency repeatedly reminded the student and indemnifier to settle the outstanding sum but to no avail. The Department of Justice therefore obtained judgment against the two defendants in the District Court. In addition to the outstanding student loan principal, the defendants were ordered by court to repay interests, administrative fee, legal costs and relevant costs incurred in pursuing the outstanding student loan.
After that, the Agency actively liaised with the student and the indemnifier and a mutually acceptable repayment plan was reached. The student was required to settle the judgment debt, interests, legal costs and relevant costs in full as ordered by court.
Result: The student was required to repay over HK$3,000 every month within four years. The monthly repayment amount was three times the original arranged repayment amount. Case information also became public alongside the judgment.