Liabilities Risk Control Analysis For Universities And Colleges

Since 1999, the higher education advances along the course of great-leap-forward development, realizing the scale expansion, and quickens the steps in the transition from elite education to popular education in China. At the same time, the rapid development needs tremendous capital. In China the higher educational expenditure, accounting for a small proportion of the GNP, mainly comes from the financial revenue and the increased outlay does not keep up with the enlargement of enrollment of higher learning. So, it is imperative to seek for new sources of fund to sustainable development of higher education. It is proved that development through raising a loan adopted by universities and colleges through financial capital market is effective. The development through raising a loan breaks through the principle presented by both domestic and foreign economists' circle and educational circle that school as the public utility can not run with deficit. However, the loan has the cost, universities and colleges are required the repayment of capital and interest, or else they may face the problems with increased levels of unsustainable debt, financial crisis and impediment to their growth. The dissertation, with the macro-background of the universities and colleges' development at present, investigates the historical causes and practical basis of their indebt, analyzing the macro and micro factors influencing the debt crisis and the way to control them with the emphasis on reasonably defining the debt scale, its determinants, and the loan scale determined by the income of the universities especially linked closely with the number of students and tuitions. Furthermore, it puts forward to set up the early warning mechanism to keep the loan crisis away. In addition, it does a research on loan policies and makes policy proposals for the debt financing of universities and colleges..