Table of Content Section1|2|3|4|5|6|7|8|9 Appendix1|2|3|4|5|6|7 Notes|Executive Summary|Download(PDF format, 798KB) Appendix 7: Option of using existingtextbook assistance funds to create textbook loan libraries Current government funding 1.        There are twoelements under the present School Textbook Assistance Scheme (STAS) i.e. thetextbook element and the non-textbook element (to pay for miscellaneousschool-related expenses including various types of stationery, study aids, othertuition fees, etc). In this option, the non-textbook element of the assistancewill not be examined as this does not directly relate to the purchase oftextbooks. 2.        The existingrates of the textbook element are set at 100% of the average surveyed costs oftextbooks. Prior to 1999/2000, the rates for secondary students were set at 80%of the average costs. This was based on the assumption that secondary schooltextbooks are longer lasting and students may sell them, or they may beinherited by others at the end of the school year. In recognising that thisassumption may not necessarily happen in practice and to simplify thearrangements, the SFAA removed the 20% discount in 2000-2001. 3.        Statistics ontextbook purchase assistance for the past few years are as follows: 　 1996-97 1997-98 1998-99^ 1999-00 2000-01 Eligible student enrolment n/a 653,907 867,636 880,227 885,412 No. of Applications Received 157,582 163,473 311,517 339,608 373,578 No. of Successful Applications 157,240 162,986 289,169 319,156 348,839 Primary, P1-P6 Full grant: Half grant: Total: 10,009 64,441 74,450 9,273 71 670 80,943 14,431 93,609 108,040 27,900 102,927 130,827 33,816 121,395 155,211 Secondary,S1-S7 Full grant: Half grant: Total: 8,173 74,617 82,790 7,153 74,890 82,043 22,305 158,824 181,129 38,014 150,315 188,329 41,892 151,736 193,628 % of students obtained grants n/a 24.9% 33.3% 36.3% 39.4% Grant Rates*, per student P1-P6 $ 810 ($ 726) $1,029 ($ 930) $1,221 ($1,109) $1,332 ($1,224) $1,790 ($1,390) S1-S3 $1,477 ($1,399) $1,683 ($1,602) $1,766 ($1,683) $1,756 ($1,661) $2,546 ($2,146) S4 - - $1,592 ($1,543) $1,632 ($1,562) $2,382 ($1,982) S5 - - $ 978 ($ 903) $ 960 ($ 898) $1,516 ($1,116) S6 - - $1,463 ($1,400) $1,492 ($1,438) $2,144 ($1,744) S7 - - $ 416 ($ 347) $ 422 ($ 371) $ 840 ($ 440) Textbook assistance: Total: $ 94M $101M $113M $121M $210M $224M $254M $272M $341M $426M Note: -     ^ STAS was extended to cover senior secondary studentsand students in local private schools under the Direct Subsidy Scheme, witheffect from 1998-1999 school year. -    * Grant rates were based on an annual survey on the averagecosts of textbooks. -    ( ) Figures excluded non-textbookelements. Source: SFAA Cost estimate of setting up a textbook loan library scheme 4.        In estimating the cost of theloan library option, and examining the ambit of a scheme, the followingassumptions are made: - government will not increase totalexpenditure on textbook assistance, based on current costs; and - whether receiving grants or not, students must not be required to pay more forthe loan of textbooks than purchases made under the existing scheme. 5.        According toSFAA's statistics, the number of students who benefited from the textbookassistance scheme in 2000-2001 was 348,839. In this school year, 22% of grantrecipients received a full grant, and 78% received a half grant. That is, 75,708students (33,816 primary students and 41,892 secondary students) received a fullgrant, and 273,131 students (i.e. 121,395 primary students and 151,736 secondarystudents) will receive a half grant, in 2001-2002. 6.        The economic lifeof a textbook is assumed to be three years (whether through normal wear and tearor revision). The Government's expenditure under the current STAS over a periodof three years is $1,023M. The current industry estimate is that annual textbookturnover is $1,500M. Therefore, 68% of the approximate amount that would berequired to provide assistance to schools to make initial purchases of textbooksfor their loan libraries is the amount that is spent per annum on subsidies to aminority of means tested Hong Kong students for textbook purchases. 7.        If the amountspent per annum was allocated to constructing loan libraries, Hong Kong studentswould only need to pay for the shortfall that schools would incur in thepurchase of textbooks, i.e., $477M over three years, rather than the totalindustry turnover of $1,500M.   Present STAS Proposed Loan Library 　 A proportion of students received govt textbook assistance; Govt pays out $341M [39] a year. All (100%) students covered; govt finances $1,500 M* in the first year. 1st Year $ 341 M $1,500 M 2nd Year $ 341 M $ 0 M 3rd Year $ 341 M $ 0 M Total: $1,023 M $1,500 M Shortfall: 　 $ 477 M Note: * Figures are derived from the number of students by class level and the corresponding new grant rates in 2000-2001. The grant rates were based on an annual survey on the average costs of textbooks. 8.       Assuming that government will make a one-off pre-payment of $1,023M for purchaseof new textbooks at the start, but not the shortfall of $477M, it is proposedthat students who would not, under the current system, receive the means testedassistance, would pay a rental fee for textbooks. Students who would receive afull grant under the existing scheme would be exempted from paying the rental,and those students who would receive a half grant would be required to pay halfthe rental fee. 9.       Using the above projected estimates of running the SFAA, it is estimated thatthose who receive no grant now will have to pay $215 per year, and those on halfgrant will have to pay $107.5 per year [40]. 10.    As noted above, thecalculations are based on the assumption that the economic life of a textbook isthree years and government will not cover the shortfall. If there is any changein these assumptions, for example, textbooks have a longer life span orgovernment is willing to pay the full amount in the beginning, the rental to bepaid by students will be minimised or nil.