China turns to loans to aid poor students

Student loans will play a key role in China's efforts to create an efficient financial aid system for its 560,000 poor university and college students.

A State Education Commission report says that although most provinces and cities have begun setting up scholarships, aid funds, subsidies, work-for-study plans and tuition reduction and exemption schemes, "improving the loans system" is seen as the "most effective way" of alleviating immediate problems.

The report says the average student will receive no-interest loans of about 2,000 yuan (Pounds 144) a year. Administration of the loans will be supervised by a national body to be set up in Beijing. The central government provides most of the money for loans.

About 560,000, or 20 per cent, of China's 2.8 million university and college students are in financial difficulties. About 7 per cent of these are from poor, remote areas where annual family income is below 1,000 yuan.

In Wuhan, at a national working conference on student financial aid, Yang Zhoufu, director of the State Education Commission's financial department, said the central government has allocated 100 million yuan this year to help poor students in ministry-managed colleges and universities. The total aid allocation has reached 550 million yuan over the past three years.