Taking out a loan to go to school is a big risk. If you can’t pay it back you might find yourself in debt with collectors knocking at your door. But for some students who have faith that their education will allow them to be financially stable and able to pay off their loans, it is the best solution to the problem of not being able to pay for higher education.

Sang Seoung, who took out a loan to study tourism at Angkor University in Siem Reap is one of a growing number of Cambodian students who are taking advantage of loans, often given by the owners of the schools themselves, in order to put off paying for school until after they graduate.

After finishing high school, Sang Seoung did not have financial support to continue at university. He expected to head to his family farm as soon as he graduated but was pleasantly surprised when he received a loan from Borey Seang Nam, a Cambodian People’s Party lawmaker and owner of Angkor University, to study at his institution.

In many countries, student loans are the norm rather than the exception. In America, for instance, 66 percent of undergraduate students in 2008 finished their studies in debt after taking out a student loan. The average size of their debt was US$23,186. There are dozens of companies in America that provide loans specifically for university students and although Cambodia has a much smaller and more informal system, the same question exists once the loan is made: Can students pay them back upon graduation?

Now that he has graduated from Angkor University, Sang Seoung said he is struggling to return his loans through his job as a commune clerk in Siem Reap, but he hopes that eventually his skills in the tourism sector will pay off.

Although giving loans to students is a risk, because there is no guarantee that students will be able to repay them, Eth Chanda, the general manager of Angkor University, said that his institution has had no problems since they began offering student loans in 2005.

“Upon giving the loan we look at the condition of the candidate’s family and they are required to fill out many forms and sign a contract,” he said, adding that applicants also need to have a specific home address. Loans are given out for as many as four years or as little as a semester, depending on the needs of the student.

To encourage poor students to continue their studies Panha Chiet University, located in Phnom Penh, also gives loans to students who would otherwise have to join the workforce straight out of high school. As with Angkor University, the loans are given by their president, General Run Rathveasna, who is the director of Cambodia’s Economic Police Department.

“To get a loan to study here, a student must have a high school degree and fill out the application form along with other documents,” said Reasmey Konira, head of administration of Panha Chiet, adding that students can take out loans for degrees from bachelors to PhDs.

According to Reasmey Konira, if the student is unable to return the loan during the period defined in their contract, the university will investigate on the case and find a solution or make a new contract.

Pen Sithol, director of the Department of Standards and Accreditation in the Council of Ministers, was unable to say how many of the schools that report to his department have student loan programmes. But he suggested that the number was limited due to Cambodia’s weak job market, which leads lenders to doubt that student-borrowers will be able to pay back the loan.

According to Ich Seng, the chancellor of Cambodia Mekong University, his university “does not have a loan programme for students to study because we do not have enough money to give loans to many students”. He added, “it is normally the bank who should deal with it”. He said that he has heard discussions about Cambodian banks providing student loans, but was not aware of any banks that currently offer this service.

‘The ministry has not set up a loan programme yet,” said Mok Nang, a deputy director of the ministry’s Department of Higher Education. “But some higher education institutions have discounts and scholarships in order to help poor students.”

Although Sang Seoung is worried about his financial future, he is grateful for the loan he received four years ago. “Loan programmes are a bridge for poor students to study and it’s a way to push the students to study harder,” he said.