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Chinese authorities have decided to raise the annual government-subsidized loan amount students can apply for and adjust the interest rate to alleviate the burden on college graduates from families with financial difficulties.
Starting from the fall semester of 2023, undergraduates can borrow up to 12,000 yuan annually in state loans while graduate students can borrow up to 16,000 yuan annually, according to a circular issued by China’s Ministry of Education and four other departments on Tuesday.
Previous limits were 8,000 yuan and 12,000 yuan, respectively.
The interest rate on such loans will be reduced from the previous 30 basis points lower than the Loan Prime Rate (LPR) for the same period of time to 60 basis points lower than the same period LPR, according to the circular.
Government-subsidized student loans are available to full-time college students from economically disadvantaged families, and are aimed at helping such students cover study and living expenses during their school years.
Students who have already applied for such loans are eligible for the new measures, according to an official from the Ministry of Education.
The circular also encouraged banking institutions to develop and improve credit student loans for postgraduates with convenient procedures and controlled risks, and to offer certain concessions in terms of loan amount, interest rate, term and repayment method.
College students graduating in and before 2023 are exempt from paying the interest on loans for this year, and they can also apply to defer this year’s repayments of the student loan principal for one year, said the circular, adding that no penalties or compound interest will be charged.
Implemented in 1999, China’s state-subsidized student loans have been adjusted in accordance with the country’s economic and social development to meet the needs of college students faced with increasing tuition fees, basic living expenses and other costs during study.
By the end of 2022, more than 400 billion yuan of government-subsidized loans had been disbursed nationwide, benefiting over 20 million students.
After the circular was issued, relevant authorities vowed to urge and supervise the banks to carry out the new measures to make sure that college students enjoy favorable loans as soon as possible. (CGTN)
