Online agencies banned from lending to college students
Due to the lack of financial knowledge, many students found out the loans they took became outright usury that they couldn’t afford to pay back
Online lending institutions are banned from offering any loans to college students, said Zhao Jianjun, deputy director of the finance bureau in the Education Ministry, China News Service reported.
A lot of online lending agencies use misleading or false advertising to lure students, Zhao said. In this circumstance and due to the lack of financial knowledge, many students found out the loans they took became outright usury that they couldn’t afford to pay back.
Earlier this year, the Education Ministry, the China Banking Regulatory Commission and the Human Resources Administration have co-released a document to officially ban online college student loans.
In order to fulfill students’ need of consumption, commercial banks are encouraged to issue micro credit loans for college students. Bank of China and China Construction Bank have already launched this business.