Income-contingent repayment for student loans: Reducing defaults and improving welfare in china's ethnic minority regions

China’s National Student Loan program safeguards educational equity for disadvantaged youth, yet its rigid fixed-repayment framework triggers severe default risks, especially in low-income mountainous ethnic regions featured with unstable seasonal employment. To resolve this structural mismatch, China launched the Income-Contingent Repayment (ICR) pilot scheme, which ties debt payments to graduates’ real disposable income to ease financial pressure. This study combines national official panel data and micro field survey data from Liannan Yao Autonomous County, employing descriptive statistics and propensity score matching for cross-level comparative empirical analysis. The findings verify that ICR effectively curbs loan default risks and generates multi-dimensional household welfare gains by stabilizing household consumption and encouraging intergenerational human capital investment. However, language-related information gaps, high administrative transaction costs and insufficient institutional trust significantly limit grassroots policy participation. Targeted localized reforms covering bilingual publicity and simplified service procedures are essential to build inclusive, sustainable student loan systems for ethnic minority communities. This research also delivers practical policy insights for Asian developing countries troubled by student debt risks and unbalanced regional educational development.