CDB will start accepting student loan applications for 2020 from today. To comply with the newest national policy on student loans, CDB has adopted a lower interest rate, which is measured as the 5-year LPR minus 30 bps and is estimated to be 0.55 pp lower than last year. The maximum loan term has been extended from 20 years to 22 years, and students need to start making principal payments six years, instead of four years, after graduation. This is to reduce the financial burden on students from poor families and give them more time to repay loans. It is estimated that in 2020 CDB will provide a total of more than 30 billion yuan in student loans for 4.3 million students.
In the context of this year’s larger number of students to take the National College Entrance Examination (NCEE) and expanded enrollment by higher technical and vocational schools and university graduate schools, CDB will continue its policy of putting no cap on the total amount of student loans and the total number of eligible loan recipients with a view to satisfying the need of every student from a poor family for loans. CDB has also launched pilot programs for online loan renewals to support epidemic prevention and control. In areas at medium and high risk of epidemic infection, areas with a larger number of applicants, and flood-stricken areas, facial recognition technology for real-person authentication has been adopted, allowing students to apply for loan renewals, complete the review process, and sign agreements online. These zero-contact loan services are intended to reduce gatherings.
In 2020, CDB has been further improving its student loan services. By allowing advance applications during high school, CDB is able to determine before the NCEE the loan eligibility of students that fall into the following seven categories: (1) students from families registered as living in poverty; (2) students from families receiving the subsistence allowance; (3) students receiving support for people in extreme difficulty; (4) students who are orphans or whose parents are severely disabled; (5) students who are children of martyrs; (6) students who are disabled and come from poor families or who are children of disabled persons from poor families; and (7) students who have obtained the national grant-in-aid during high school. So far this year, 2.11 million students across the country have become eligible for loans by submitting applications in advance. Their worries about not having enough money for higher education have been addressed before they take the NCEE.
To provide a more convenient loan process for students who come from poor families but fall outside the seven categories, CDB will determine their loan eligibility only based on the Application Form for Verification of Students from Families Facing Financial Hardship. The loan applicants don’t have to complete any similar verification at a government agency and will receive one-stop loan services from CDB. CDB has also been working with the China National Center for Student Financial Aid to bring loan services directly to villages, towns, and high schools. Hence the last mile problem in delivering loan services is solved and the loan process can be completed on the doorstep. In 2020, CDB has set up loan service offices at 1,077 high schools and central schools (schools administered by a government agency in a village or town) across 23 provinces and autonomous regions, including Guangxi Zhuang Autonomous Region, and Yunnan, Gansu, and Guizhou Provinces. CDB has also brought a more efficient paperless loan process to 2,260 districts and counties. This process features digital contract signing and a simplified procedure that no longer requires submission of any printed documents.
Student loans granted by CDB have so far covered 2,830 educational institutions recognized by the Ministry of Education, including regular higher-education institutions, scientific research institutes, and Party schools. Their beneficiaries include preparatory undergraduates, regular higher-education students, and graduate students. Since 2005, CDB has granted a total of 195.7 billion yuan in 30.49 million national student loans, which have benefited 13.33 million students from poor families.
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