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Analysis of college excessive debt risks and preventive measures

Author: WeiZhi From: www.yourpaper.net Posted: 2010-03-15 01:21:25 Read:
[Abstract] In the process of higher education has expanded rapidly, the national financial investment funds for higher education has lagged far behind the growth rate, colleges and universities to use bank loans to ease the shortage of educational resources, the contradiction between the lack of government investment, increase the proportion of college debt, excessive The loan principal and interest expenditure on universities facing severe risk, simple analysis and explore college excessive liability risks and precautions.
[Keywords] college excessive debt; risk; precautions

With the development of market economy and the deepening of the reform of colleges and universities, our colleges and universities rapid enrollment, higher education increasingly fierce competition, all colleges and universities to improve the teaching and learning environment, and expanding school popularity, influence and inherent requirement to create a first-class universities need to continue to increase capital investment limited state financial allocations, social sponsorship funding sources. Colleges and universities to address the funding gap, only to seek bank loans and other channels to solve the problem of inadequate funding for education. College loans to banks means compensation for the use of funds must pay a certain cost of capital, and excessive lending leading to colleges and universities face pressure to pay huge amounts of debt principal and interest. In recent years, colleges and universities how to deal with the risk of over-indebtedness problem has become a hot and difficult problems need to be solved.

A college excessive debt and risk Overview

University liabilities assumed by higher education institutions can be measured in monetary terms, the repayment of the debt to assets, or services. As nonprofit institutions, colleges and universities debt risk is the risk of facing the movement of funds in the process of operation. College excessive debt is college loans to banks fail to grasp the size of loans, not properly be reasonably estimated solvency, resulting in loan size is too large, liabilities structural imbalance over loan risk cordon universities liabilities. Universities excessive debt caused by the colleges and universities can not be timely repayment of the loan principal and interest, the financial structure and the marked deterioration, the financial loss of elasticity, a shortage of liquidity, cash flow difficulties, leading colleges and universities face a variety of risks. The risk of excessive debt caused by college policy risk, changes in interest rates risk and liability structure unreasonable risk, credit risk, financial risk. College excessive debt manifestations unable to repay the loan, insolvency, long loans, the loan to the loan-raising.

Second, universities excessive liability risk causes

(A) In order to speed up the development of higher education in China, the national legislation to encourage colleges and universities and more channels to raise funding for education, so the universities to the bank loan is not subject to government departments and timely monitoring
With the changes in national economic policy, national fiscal transferred to the higher education funding is limited, far beyond the affordability of college excessive debt, unable to repay loans, some schools even interest are not from the individual schools insolvent. Jilin University, told the Ministry of Education filed a petition for bankruptcy in March 2007, bringing the college loans has considerable universality and hazardous gradually exposed. When college loans can not get timely treatment and regulation, normal teaching universities affected unable to repay the loans, even bankruptcy, the government risks will increase, and will lead to significant financial losses, the government will have its repayment of the loan. Therefore, the risk of massive college loans are ultimately borne by the Government.
(B) lack of awareness of the risks of college loans, repayment is not a strong sense of responsibility
Colleges Chancellor of the tenure system, the independent supervisory body awareness and economic awareness of university leadership is not strong, the risk of loans, the repayment obligations of lack of knowledge, no scientific measurement and control of risk on college loans, college leaders shortsighted achievements, ignore the school long-term development that the university is a national school assets belong to the state, the schools do not have to worry about the collapse of the problem, even if the problems government commitments.
(C) the single source of college funding channels less range narrow repayment, the source of repayment and debt do not match the scale of
The now college funds to repay the loan channels: the tuition fees, accommodation income, financial allocations, logistics, social services operating and other income. Which financial allocations and tuition fees, accommodation income is the main source of loan repayment, the financial allocation is basically for school the day-to-day affairs expenditures and staff salary expenditures; tuition and accommodation fees, the State expressly provides for the return of students to make up teaching lack of funding, the employment guidance as well as for students in other expenses, the rest of this part of the tuition fees, accommodation income is used to repay the the huge loan principal and interest of university is not enough, some colleges and universities loan is gradually reduced to a bad debt.
(D) college loans mismanagement
Existence of unreasonable expenses, such as loan funds for the daily expenses of the school or as staff welfare spending, low capital efficiency. Loans when the market supply and demand situation of national financial policy and funding of university research is not comprehensive, is not timely, not good at negotiating with banks to exchange imprudent select the types of loans, the high cost of loan funds; loan term structure is not a reasonable match, repayment time too concentrated.
(E) Bank reform, in order to maximize profits and lower risk target
College enrollment, the bank saw huge college funds to put on the market as well as colleges and universities a good credit rating, stability and growth, and to urge the banks to take the initiative and university cooperation, the lower the threshold for bank loans, did not consider the university's repayment ability and credit. Universities to pay out large loans, as far as possible to meet the demand for college loans, the some colleges bulls loans and loan-raising loan.
Universities over-indebtedness reasons of both universities, and encourage college loans to promote economic development and commercial banks with government departments take the initiative to reduce the loan conditions, and other factors. Of the excessive debt is actually government departments, commercial banks, and university administrators have their own expectations, the result of the interaction.

Third, colleges and universities the excessive debt precautions Exploration

(A) to strengthen the management and control of the loan funds
Colleges and universities should strengthen liabilities awareness, carefully study the supply and demand situation of national economic policies and capital markets to determine the size of loans, loan term, according to the national monetary policy and money market interest rate movements reasonable; developed by optimizing the structure of loan funds, and reduce the cost of borrowing; science reasonable use of funds program. Strengthen cooperation with banks, good college credit, carefully choose the types of loans, and strive for low-interest loans. According to the progress of the project loan, with a reasonable proportion of short-term and long-term loans, to ensure that the loan funds to use a reasonable standard to improve the efficiency in the use of loan funds. Strengthen financial management, strict financial system, to ensure that the accounting information is true and reliable, timely, comprehensive, accurate, objective and reflect the of college debt financing and use. Strict budget management, and will repay the loans included in the budgeting, college loan repayment fund to develop scientific repayment plan, determine a reasonable repayment term structure to avoid repayment time to focus, to ensure the repayment of the debt. Establish a sound system of internal controls within the schools, and give full play to the role of auditing and supervision departments to oversee the implementation of a full range of loan projects, and to monitor the whole process.
(Ii) to increase awareness of the risk of loans and strengthen risk prevention measures
Establish an effective risk prevention responsibility system, regulate the borrowing program to control the size of loans, and to maintain an appropriate liability. The debt risk early warning system. College financial officers should be in accordance with the relevant financial ratios to test the security of the debt, keep track of and understanding of debt to financial risk, to strengthen the security of the loan funds, reasonable, effective management. University leadership should establish risk awareness, strengthen the monitoring of financial risks, to prevent the risk of loans, and colleges and universities to maintain an appropriate liability. Have independent educational awareness, correctly handle the relationship with the actual affordability of educational development needs, advocating austerity adhere to our capabilities, non-teaching expenditures from tight arrangements, optimize the structure of expenditures, scientific control school costs. Change everything rely on the dependence of the fiscal school thinking, adhere to the principle of "who loans who is responsible for" Strict implementation of leading economic responsibility audit, risk awareness to penetrate to the day-to-day management of the school to promote the orderly conduct of the school management.
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