The Chinese government is implementing incentive measures to encourage commercial banks to provide loans to needy students who cannot otherwise afford higher education.

Commercial banks have issued 5.2 billion yuan or some US$626 million of student loans over the past four years, just half of the goal set by the Chinese government.

However, there are still students dropping out of school due to shortage of money.

About 2.4 million students -- 20 percent of the total in higher education institutions in China -- are still facing economic difficulty, while only 830,000 students received student loan in the past four years.

The slow increase of student loans and the commercial banks' unreadiness to provide them, compared with the fast growth of car and housing mortgages, have caused great concern in the Chinese government.

(CRI September 1, 2004)