By the end of June this year, more than 800,000 college students
from low-income families had received 5.2 billion yuan (US$627.9
million) from a student bank loan program that started in 1999. But
with enrollment quotas soaring, so is the number of financially
strapped students.
Currently there are about 2.4 million such students, accounting
for 20 percent of the total.
At the same time, banks are growing increasingly cautious about
lending, particularly in making high-risk, unsecured loans to
students who must depend on their own unknown future income to
repay the loans.
Vice Minister of Education Zhang Baoqing announced on Tuesday
that a new, improved version of the plan will help needy students
to overcome these hurdles.
Under the program, poor students can apply for and get loans
from banks, repaying them over a certain period after they graduate
and find jobs. The government will provide subsidies to pay
interest on the loans.
Of direct benefit to the banks is the implementation this year
of compensation funds, which are provided by both the government
and universities. Until now, the banks were required to assume
virtually all the costs and risks.
The banks will also be permitted to grant or deny loans based on
their own calculations of potential profit, costs and risks.
National and provincial centers for the management of student
loans will be set up to strengthen coordination between lending
banks and universities, an area that has been problematic.
In addition, repayment terms have been extended from four years
to six years after graduation. Students unable to find jobs
immediately may defer the start of repayment for up to two
years.
Vice President Wu Xiaoling expressed confidence in the
new plan's ability to help more students stay in school. Officials
from the China Banking
Regulatory Commission and the Ministry of Finance also seem
certain that the program will now be better managed.
In addition to the improved lending program, the central and
local governments, as well as the universities, have established
various scholarships.
Chinese universities granted 3.3 billion yuan (US$398.5 million)
in scholarships last year, aiding 4.5 million students.
The "green light access" scheme ensures that students from poor
families are allowed to register even if they cannot pay their
tuition on time. The universities also help disadvantaged students
to find jobs on campus once they are enrolled. Last year, 1.5
million students benefited from such programs.
(China Daily September 1, 2004)