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Students Face Suits for Loan Defaults
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A local bank in Guangdong may sue as many as 10 university graduates who have failed to repay their student loans, a staff member of a local court said yesterday.


Initial reports said a court hearing was to be held this week. However, it was postponed due to "some uncertain conditions", according to a staff member surnamed Chi with the People's Court of Chancheng District in Foshan, South China's Guangdong Province.


"We have already dealt with three student loan suits in a separate case," said Chi.


Early last month, the Fengjiang branch of the Bank of China in Foshan sued three students who graduated in 2005, but had not paid back loans from the bank.


"The previous three cases have been settled. After the hearings, the students agreed to pay back their loans by the end of August," Chi said.


A university graduate surnamed Huang had signed a loan contract worth 12,000 yuan (about US$1,600) with the bank in 2003 to cover his tuition at a local vocational college.


However, he allegedly failed to repay 4,460 yuan within the term set by the contract. After the hearing on May 31, he agreed to pay off his outstanding debt before August 31.


"And now that another, larger lawsuit against students is coming up, the issue of student loans is once again back into spotlight," Chi said.


Chi told China Daily that he was working on a report on the relationship between university students and lenders in an attempt to provide "useful information" to banks and educational authorities.


"The previous three cases did not suggest a clear reason why university graduates fail to repay their loans, so we are studying the law in an attempt to find solutions to such cases," Chi said.


Ma Yonghong, a local lawyer, yesterday called on university students to be "seriously" responsible for their loans.


Student loans are often subsidized by the government to help poor students finish their higher education.


(China Daily June 12, 2007)

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