The Ministry of Education and the People's Bank of China have stipulated that banks and colleges should sign contracts before the beginning of the new semester to ensure loans for eligible needy students, according to Beijing Youth Daily.
Statistics from the Ministry of Education show that in June, 351,000 students in economic difficulties were entitled to loans, about 31.2 percent of the 1.13 million applicants.
To reduce risk to the banks, which find it unprofitable to extend small loans to so many students, an information system on student borrowers will open in September so students' credit worthiness can be checked, said Zhang Guangming, deputy director of the National Center for Student Loans of the Ministry of Education.
Statistics show that over 1.42 million college students are in economic difficulties, needing annual loans of about 7.1 billion yuan (US$855 million).
China adopted a system of student loans in 1999 in eight cities, including Beijing and Shanghai. The loan system spread to the rest of the Chinese mainland in September 2000.
(Xinhua News Agency August 29, 2002)