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Financial Parachutes Give Poor Students Hope
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For Qiu Ji, a girl from a poor family in Southwest China's Yunnan Province, poverty isn't quite the trap it was before she entered university four years ago.


After her father died when she was 11, Qiu's life was shrouded in helplessness as her mother struggled to support the two of them with the mere wages she earned washing dishes in restaurants in the tiny town of Gejiu.



Poor students receive living subsidies from a teachers' college in Huaiyin, East China's Jiangsu Province.


Qiu was tempted to give up her opportunity to study in college when she received the admission letter from Nankai University in Tianjin in 2003, because her mother could not afford to pay the high tuition fees -- more than 5,000 yuan (US$650) per year.


However, her hopes were rekindled when she read the letter again and discovered that the school provided a "green passage" to enable poor students to register for enrolment and defer tuition payments.


Qiu, now 22, applied for a student loan and is expected to graduate from the Computer Science Department later this summer.


"Without the financial aid system for students, such as national student loans, scholarship and grants, I would be shut out of the university because of poverty," said Qiu, who was accepted by the China Academy of Sciences as a graduate student recently.


Qiu is one of the lucky ones among tens of thousands of impoverished college students who has benefited from the country's financial aid system for students.


More than 2.4 million college students had received national student loans, totaling more than 20 billion yuan (US$2.6 billion) by the end of June last year, since the loan system was piloted in 1999 among 136 universities in Beijing, Shanghai and six other large cities.


Presently, about 1,500 out of the country's more than 1,700 universities have introduced student loans, according to latest figures from the Ministry of Education.


Roughly 4 million students have applied for a loan but 27 percent of them failed to get one, partly because some universities in small or underdeveloped cities failed to implement the loan system efficiently, ministry spokesman Wang Xuming, said.


"Our goal is to enable every poverty-stricken student to be covered by the loan system," Wang said.


"The country has established a complete financial aid system for poor students, including student loan, scholarship, grants, tuition reduction and exemption policies."


The country earmarked 9.5 billion yuan (US$1.2 billion) this year exclusively for student scholarships and grants, more than five times more than last year.


The government has promised to earmark 20 billion yuan (US$2.6 billion) for student scholarships and grants next year.


Higher education in China is largely funded by tuition fees, and a good number of students who come from rural, remote or poverty-stricken areas struggle to pay tuition because of regional economic disparities.


It is not uncommon for students to work part-time to pay their tuition.


The national student loan scheme offers interest-free loans of up to 6,000 yuan (US$780) per year for each student. The interest is calculated after graduation and borrowings need to be paid off within six years after studies have been completed.


More than 530 million citizens throughout the country have been catalogued by the personal credit database system which was launched in January last year, officials with the People's Bank of China, the country's central bank, said.


Wan Cunzhi, deputy director of the credit bureau of the central bank, said almost all college students were traceable by the credit system, People's Daily reported.


Before the establishment of the credit system, the contract breach ratio of student loans was as high as 30 percent in some places, Wan said.


However, this figure has dropped since the launch of the credit database.


The student loan contract breach rate was roughly 1 percent in the past six months in the Tianjin branch of Bank of China, according to Wang Hao, who is in charge of student loan business at the Nankai subbranch of the bank.


"Student loan is a business with high risk and low returns as it has no guarantee of assets," Wang said.


"However, since there is a national preferential policy for poverty-stricken students, we would like to support the policy."


Almost all applicants have got a loan since the bank started the student loan business with local universities in August 2004, Wang said.


"However the contract breach rate might rise in the near future as more students are expected to graduate from school and enter the tough job market," he said.


Monthly repayments for a student loan of 30,000 yuan (US$3,900) will be 700 yuan (US$91) from the third year after graduation to the sixth and final year of the loan.


Chen Quan, a new graduate in Chongqing of Southwest China earns about 1,000 yuan (US$130) a month.


Though this is the average wage for many of his peers, he struggles to make ends meet, let alone pay back the loan.


Since the beginning of this year, the Ministry of Education has launched a series of measures to help students pay back their loans.


If the graduates choose to work in the remote and rural areas in western China for at least three years, their loans will be paid off by the State.


Some universities have introduced temporary subsidy and low-interest loans for disadvantaged graduates.


From September this year when the autumn semester begins, tuition and accommodation fees will be scrapped for freshmen majoring in education at six top teaching universities in Beijing, Shanghai, Changchun, Wuhan, Xi'an and Chongqing. The students will also be granted an allowance.


The cost will be covered by the central budget, as long as the students serve in the education field for 10 years after graduation, the ministry said.


"Many poverty-stricken students who received aid would like to pay back to the society and are ready to lend a helping hand to others," said Song Duanshu, a son of a disabled farmer in East China's Jiangsu Province and a graduate student from Tianjin Science and Technology University.


Song has become a volunteer for dozens of charities.


He paid his tuition and living expenses through a scholarship, grants and the earnings of part-time jobs and finished his four-year studies for a bachelor's degree without using a penny from his home.


"The moment I decided to attend the college entrance exam five years ago, I knew I had to live on my own from then on," said Song whose father had undergone several surgeries which put the family in heavy debt.


"I am not helpless as the university learned of my financial problem and offered me grants and campus jobs soon after the first semester began."


From library assistant to dormitory caretaker, and letter sorter to lab assistant, Song has pursued more than a dozen types of on-campus jobs. He also served as a home tutor to several children at the recommendation of his school.


Learning that a Tianjin resident Sun Shubing, 38, had never left her bed for more than 20 years due to paralysis, Song, who majored in industrial design, decided to make an electric wheelchair especially for her early last year.


Spending more than six months and 2,000 yuan (US$260) of the financial award as a top-10 college student in Tianjin, Song and his fellow students designed and constructed the wheelchair.


When Sun was escorted by Song outside in the wheelchair for the first time in many years, both shed tears.


"I felt I was the happiest person in the world at that moment," Song recalled.


(China Daily May 22, 2007)

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