Students applying for student loans/ source: MOE; percentages calculated by author from MOE data

As summer slips into fall, universities have finished ship-ping out this year's graduates and have now turned toward welcoming their new freshmen classes. These arrivals and departures, in addition to shaping the future prospects of these young people, can also have big impacts on their personal and family finances. In 2009, tuition and fees averaged NT$59,490 at public universities and NT$109,806 at private universities, figures that represent 10.91% and 20.12% of Taiwan's average per-capita income. Going to college here certainly poses a heavy financial burden.

Consequently, many have to take out student loans to reach their educational goals. And graduates, even before they find a job, immediately find themselves facing the pressure of making payments!

According to the Ministry of Education, the number of applications for student loans from students in high schools or postsecondary educational institutions grew 5.3 times from 1998 to 2008 (from 152,000 to 801,000). The total amount of money loaned out grew from NT$5.583 billion to NT$29.906 billion. And the percentage of students applying rose from 4.42% to 19.16%, quickly swelling to almost one-fifth of all students.

From Figure 1, we can see that the growth in the percentage of students applying for student loans occurred largely in the years from 1998 to 2003. One can't help but wonder: why?