Tag: College Student Loans

Policies on interest exemption and other matters for student loans during the epidemic

During the COVID-19 epidemic, in order to reduce the financial burden on students from financially disadvantaged families, the national and local governments promptly issued a number of student loan-related policies, the most notable of which were policies on interest exemption and principal repayment deferral. Below is a detailed explanation of these policies:

1. Interest exemption policy
   Policy content:

In response to the impact of the epidemic on students from families with financial difficulties, the state decided to waive the interest on state student loans that should be repaid within specific years. Taking 2024 as an example, for students with loans who graduated in 2024 and previous years, the interest on national student loans that should be repaid in 2024 will be exempted. This policy effectively reduces the repayment pressure on graduates and helps them tide over difficulties.

Implementation:

The exempted interest will be borne by the central finance and local finance respectively, and will be implemented in accordance with the national student loan interest discount policy.
Students with loans do not need to apply separately, and the sponsoring bank will handle the exemption procedures directly.

2. Principal deferred repayment policy
   Policy content:

In addition to interest exemptions, the state has also introduced a principal deferred repayment policy. For students with loans who graduate in 2024 and previous years, the principal of the national student loans that should be repaid in 2024 can be deferred for one year upon independent application by the loan students. This policy provides graduates with more time to repay their loans and reduces their repayment pressure.

Implementation:

Students with loans need to submit an application for deferment of repayment to the sponsoring bank.
Deferred loans do not include penalty interest and compound interest, and the risk classification will not be lowered for the time being.
The maximum period of student loans shall not exceed 22 years. After extension, the loan period will be extended accordingly.

3. Policy significance and impact
   Policy significance:

Alleviating financial pressure: During the epidemic, many students from financially disadvantaged families faced problems such as difficulty in finding jobs and reduced income. The policy of exempting and deferring student loan interest and principal effectively alleviated their financial pressure.
Promote educational equity: By reducing students’ repayment burden, these policies help more students from financially disadvantaged families complete their studies and promote educational equity and social progress.
Enhance social stability: Reducing students’ financial pressure can help reduce social problems caused by economic difficulties and enhance social stability.
Policy implications:

It improves the repayment willingness and ability of loan students and reduces the risk of default.
It promotes the employment and entrepreneurship of college graduates and helps alleviate employment pressure.
It has enhanced social recognition and satisfaction of the student loan policy and improved the policy effect.

4. Summary and Outlook
   During the COVID-19 epidemic, the timely introduction of student loan interest exemption and principal deferred repayment policies by the national and local governments provided strong support to students from families with financial difficulties. These policies not only alleviate students’ financial pressure, but also promote educational equity and social stability. In the future, as the epidemic situation changes and the economy and society develop, we expect the national and local governments to continue to improve student loan policies and provide support and protection for more students in need. At the same time, we also hope that all sectors of society can pay attention to and support the student loan cause and jointly contribute to building a harmonious society.

In the process of popularizing and deepening higher education, student loans, as an important funding policy, provide countless students from economically disadvantaged families with the opportunity to continue their studies. It not only alleviates the economic pressure of students, but also promotes educational equity and social progress. This article will elaborate on the application conditions, preferential policies and relevant policy adjustments of student loans during the epidemic.

1. Application conditions for student loans
   Student loans, especially national student loans and student loans from the place of origin, are an important funding method for students from economically disadvantaged families. Its application conditions mainly include the following aspects:

Identity and student status requirements:
Applicants must be full-time students in ordinary colleges and universities, including undergraduate students (including higher vocational students), graduate students and second bachelor’s degree students.
Applicants must have the nationality of the People’s Republic of China and hold a valid resident identity card of the People’s Republic of China.
Applicants must be formally admitted by full-time ordinary undergraduate colleges, higher vocational schools and higher technical colleges (including private colleges and independent colleges) approved by the state to establish and implement higher education, and obtain a true, legal and valid admission notice or student ID card.
Family financial situation:
Family financial difficulties are one of the basic conditions for applying for student loans. Applicants need to provide proof of family financial difficulties to prove that their family income is insufficient to support the basic expenses required to complete their studies during school (including tuition, accommodation and living expenses).
For student loans from the place of origin, the applicant and their co-borrower (usually parents or other guardians) must be registered in the same county (city, district), and the family’s financial situation must meet the requirements of the local funding center.
Personal qualities and academic performance:
Applicants must have full civil capacity (minors must obtain written consent from their legal guardians).
Applicants must be honest and trustworthy, abide by laws and regulations, and have no illegal or disciplinary violations.
Applicants must study hard, pass the exams, and be able to complete their studies normally.
Other conditions:
The applicant’s school must sign a bank-school cooperation agreement with the Bank of China or other financial institutions to ensure the smooth issuance and recovery of loan funds.
Applicants must be approved by their school and submit other relevant materials required by the bank and school.

2. Preferential policies for student loans
   In order to further reduce the financial burden of students from families with financial difficulties, the state and local governments have introduced a series of preferential policies for student loans, mainly including the following aspects:

Increase in loan amount:
Since the fall semester of 2021, the amount of national student loans has been adjusted. The annual loan amount for full-time ordinary undergraduate and junior college students (including second bachelor’s degrees, vocational students, and preparatory students) has been increased from no more than 8,000 yuan to no more than 12,000 yuan, and then further increased to no more than 16,000 yuan. The annual loan amount for full-time graduate students has been increased from no more than 12,000 yuan to no more than 16,000 yuan, and then increased to no more than 20,000 yuan.
Interest rate discount:
The interest rate of national student loans is implemented in accordance with the loan benchmark interest rate issued by the central bank during the same period, and it does not float. Borrowing students do not need to pay interest while in school, and start to pay interest after graduation. This policy effectively reduces the repayment pressure on students.
Extension of repayment period:
The maximum loan period of the student loan is determined by the remaining study time of the borrower plus 15 years, and the maximum period shall not exceed 22 years. This policy provides borrowers with a longer repayment period and reduces their repayment pressure.
Interest and principal deferral policy:
In order to further reduce the burden of college graduates from families with financial difficulties, the state has introduced a policy of deferring the repayment of student loan interest and principal. For example, for loan students who graduated in 2024 or earlier, the interest on the national student loan that should be repaid in 2024 will be exempted, and the principal can be deferred for one year. This policy effectively alleviates the economic pressure of graduates and helps them find employment smoothly.
Early repayment policy:
If the borrower is able to repay in advance, he or she can choose to repay the loan principal and interest in one lump sum. Early repayment helps reduce interest expenses and reduce the total repayment amount.