BEIJING -- China has revised its state-subsidized student loan policy in a bid to further reduce the debt burden of college student borrowers, according to an official circular.

State-subsidized student loans are priced at 30 basis points below the loan prime rate (LPR) - a market-based benchmark lending rate - of the same class and same term, said the circular, made public on Tuesday on the website of the Ministry of Education (MOE).

The latest rate applies to contracts dated from Jan 1, 2020, said the circular.

Moreover, the grace period for principal repayments has been extended from three years to five years after graduation, said the circular. Students only need to pay the interest in this period.

Borrowers need to pay off all the principals and interest within 15 years after graduation, and the maximum term is 22 years, it added.

The last time China adjusted its student loan policy was in 2015 when it extended the repayment period to 13 years after graduation, with an upper limit of 20 years.

The circular, dated July 3, was jointly issued by the MOE, the People's Bank of China, the Ministry of Finance, and the China Banking and Insurance Regulatory Commission.