College graduates who choose to serve in China's remote areas for three or more years will no longer have to repay government study loans, China's Ministry of Education said in Beijing on Thursday.

Cui Bangyan, the ministry's official in charge of student loans, said the policy concerns college students who receive financial assistance for their study and are willing to work in China's western region --or in local governments, companies and institutions at the county level and below-- in remote or impoverished areas for three or more years after graduation.

The government plans to pay back the student loans and interest over three years, with 30 percent paid in the first and second year each and 40 percent in the third year, according to Cui.

A maximum of 5 percent of students receiving government loans will be able to apply for the government repayment, Cui said.

However, colleges where most students major in agriculture, hydraulic engineering, geology, mineralogy, navigation, pedagogy and ethnography will be able to include up to eight percent of loan recipients.

Those who fail to serve the prescribed three-year term will have to pay back the loan by themselves, Cui said, adding that graduates who default on loan payments will be blacklisted by banks.

China launched a scheme in 1999 to provide subsidized loans to poor college students. By the end of June this year, 2.405 million students had received loans totaling 20.14 billion yuan (around US$2.5 billion).

(Xinhua News Agency September 15, 2006)