Qi Xiaocheng brought barely more than 100 yuan (US$12) with him to Beijing after receiving his admission notice to Peking University in August.

But now his tuition of 4,800 yuan (US$579) is paid off, thanks to the national loan-in-aid project for higher education.

Qi was born to a farmer's family in Luannan County in Hebei Province and always studied hard and earned good grades.

He dreamed of entering Peking University, a top university in China. But his family's poverty hindered him from pursuing that dream.

His chance came just before the National College Entrance Examination was held in early July, when he contacted Peking University via telephone and learned about the national loan-in-aid project.

"It was like seeing a light ahead in the deadly darkness," he said.

His parents, who had him peddling grain and vegetables at the age of 12, said they were not surprised their hard-working son secured the loan for study at Peking University.

The National loan-in-aid project is a credit loan-in-aid policy that started in 1999. University and postgraduate students from destitute families can apply for the loans to help them continue their college and post-graduate education.

Applicants do not need financial guarantors, and the government will pay half of the interests.

Since 2000, students who apply for the loan can have their teachers, parents or schoolmates as their witnesses.

Today, four national commercial banks in China - the Bank of China, the Industrial and Commercial Bank of China, the Agricultural Bank of China and the Construction Bank of China - are authorized to distribute the loans.

"We aim at ensuring that all students continue their studies, despite their financial difficulties," said Vice-Minister of Education Zhang Baoqing.

The aid plan has mainly helped students from rural areas, where living standards are relatively low.

According to the Ministry of Education, about 10 percent to 20 percent of new college students in China each year come from rural families.

Besides rural areas, the aid helps students from families of laid-off workers.

Li Pengfei, a student from Xinjiang Uygur Autonomous Region, was enrolled in the Department of Urban and Environmental Sciences at Peking University this year even though his parents both lost their jobs in the building industry and could not afford his tuition. Once again, the national loan-in-aid program came to the rescue.

By June 1, the loan program supported about 170,000 students nationwide. The total sum of the loans reached 1.26 billion yuan (US$152.3 million), according to the Ministry of Education. Financial sectors of different levels had paid 279 million yuan (US$33.7 million) in interest alone.

Although it is becoming easier for students to get loans, banks are worried about how the students are going to repay them.

"They (The banks) are concerned about whether the students have the ability and credit to pay back the loans," said Ma Zhengyong, deputy director of the Student Affairs Office at Peking University.

But at least Liu Guoquan, a senior student from the Department of Automotive Engineering in Tsinghua University and a loanee, said he had enough confidence to pay back the loan after graduation.

Liu said that his department is running a comprehensive teaching program and its graduates will be in great demand, especially once China enters the World Trade Organization (WTO).

As for the issue of students' credit, Fudan University set up a credit education course this year to foster university students' morality and enhance their law conception.

And Peking University held a "Credit China Forum" before the summer vacation, with university president Xu Zhihong saying that the credit loan-in-aid program should be regarded as a way to build character among university students.

Besides fostering students' conception of credit, the national loan-in-aid project pushes the students to improve themselves in many more aspects.

Su Hongbin, a student of the Architecture Department at Tsinghua University, said that national loan-in-aid project allowed him to spend more time on his studies and less on his part-time jobs.

Lu Jianlin, a student of the Automation Department at Tsinghua University, said that his money conception is now strengthened, and he can wisely budget his money.

"The project distributes students' living expenses once a month, forcing me to spend my money carefully," he said.

Yue Heng, a post-graduate student from the economic school at Peking University, said he doesn't have to rely on his family's financial support any more, with the help of national loan-in-aid project, and it really made him feel independent.

"Keeping in mind that all of my loan should be repaid within four years of my graduation, I realize I am spending my own money instead of receiving from others, so I am more frugal," he said.

In addition to the national loan-in-aid project, educational and financial authorities have established a variety of other policies aimed at helping destitute students. An aid system including scholarships, loan-in-aid, stipends, subsidies and reductions in tuition have evolved since 1987.

"But out of all of them, the national loan-in-aid plan can best develop a student's independence," Ma Zhengyong said.

Ma said that the national loan-in-aid policy should be promoted more widely to include students from ordinary families and even wealthy families.

Some students still consider acknowledging that they are destitute and have to apply for a loan shameful.

And some students view the loan as a burden, preferring to rely on their families.

Lots of families in rural areas and western China are not informed of the national loan-in-aid policy, so the aid is still out of many families' reach, according to the Ministry of Education.

"We should call on students, parents, teachers, schools and all social institutes to raise awareness about this fund program in university education," Zhang Baoqing said.

(China Daily 10/09/2001)