China plans to blacklist students who fail to pay off their interest-free loans, in a bid to ensure sound operation and lower risk for the state education loan system, the Ministry of Education (MOE) said in Beijing on Tuesday.
Cui Bangyan, the Ministry's senior official in charge of the loan management, said that information including the name, ID number and the alma mater of students who fail to redeem loan payment for six years will be publicized in various media and websites.
China introduced a pilot state education loan system in 1999, which was extended to the rest of the country in 2004, in eight major cities, including Beijing, Shanghai and Tianjin, to assist college students from needy families.
"The time has come for early applicants to repay their loans," Cui said.
According to a survey conducted by the Ministry, nearly 20 percent of prospective borrowers fail to pay back loans in various ways, indicating that the risks inherent in the state loan system have revealed themselves.
"The risks are intensified by the increasingly difficult job hunting, the high mobility of modern labor, and low awareness of the merit of credit among some students in China," Cui said.
According to documents issued by the central government, for students who have a default in payment, loan interest will be levied, the default will be recorded on the credit information system, and the student will not be given loans or credit services in the future.
The People's Bank of China (PBC), the nation's central bank, announced earlier this year that a personal credit information system that connects all local commercial banks and some rural credit cooperatives was formally established in China.
China's state loan system issued 17.27 billion yuan (about US$2.08 billion) in interest-free loans to 2.068 million college students from poor families by the end of 2005.
(Xinhua News Agency March 8, 2006)