Legal basis: Article 55 of the Higher Education Law of People's Republic of China (PRC) establishes scholarships, and encourages institutions of higher learning, enterprises and institutions, social organizations and other social organizations and individuals to establish various forms of scholarships in accordance with the relevant provisions of the state to reward students with excellent academic performance, students with majors specified by the state and students working in areas specified by the state. The state establishes funds and loan grants for students in institutions of higher learning, and encourages institutions of higher learning, enterprises, institutions, social organizations and other social organizations and individuals to set up various forms of grants to help students with financial difficulties. Students who receive loans and grants shall fulfill their corresponding obligations.