BEIJING — China has issued a circular on waiving this year's interest of government-subsidized student loans and allowing the deferred repayment of loans, the Ministry of Finance said on May 27.

College students graduating in and before 2022 are exempt from paying the interest on loans this year, according to the circular jointly released by the ministry and three other government agencies.

These students can also apply to defer this year's repayments of the student loan principal for one year, said the circular, adding that no penalties or compound interest will be charged.

The measures have been taken to relieve employment pressure for graduates with financial difficulties and optimize employment services for the students, according to the ministry.

A State Council executive meeting held on May 11 made a decision to exempt student loan interest and allow deferred repayments for college students graduating in and before 2022.

More than 2 billion yuan (about $297 million) in loan interest is expected to be waived and deferred repayments are forecast to top 5 billion yuan, benefiting over 4 million college students.