An Analysis On Cost-Benefit Of Student Loans

Under the conditions of the socialist market economy, the National Student Loan (hereinafter referred to"NSL") is one of important measures that the State Council takes to make the system of university funding approach perfection and increase the intensity of funding for the students from poor families by the use of financial means. In 1999, the government launched pilot projects of NSL in 8 cities, such as Beijing, Shanghai, Tianjin, Chongqing, Wuhan, Shenyang, Xi'an, Nanjing. As had been put into practice for 11 years, this policy had achieved some successes, such as help some students solve economic difficulties to continue their studies. However, with the coming of the first repayment peak in 2003, some universities had confronted with the default situation, some other universities'default ratio climed up to 70%, so that the bank began to refuse to grant loans to these universities, it was hard for NSL to sustain for long time.To improve the environment for the NSL, the State Council transmitted the"Ministry of Education, Ministry of Finance, People's Bank of China's Banking Regulatory Commission to further improve the NSL on Several Opinions of the notice"in June 8, 2004, and took a series of measures, such as the reform of the financial interest subsidies, the extension of repayment period, change the way of determining the handling bank and establish the NSL's risk compensation mechanisms. It seemed like a change in policy did improve the relationships among students, universities and banks. However, we can find that the NSL which was aimed at promote fairness, exacerbated the degree of fairness in some extent finally. The reason is that the universities located in more developed areas, the better the quality of their students, and the higher the credit level and brighter prospect, and vice versa. The limit of 20% poor students in college results in the distortion of the allocation of NSLs. NSL is an important means of promoting social equity and narrowing the income gap, that's why how to achieve the sound development of the NSL and expand the coverage of NSL is always a significant issue.NSL has always being attracted to many scholors, and most of the literature is to discuss the the problems inside the system, to find the way to solve these problems and how to set up a personal credit information system, there are also many research about the Student Loans in foreign countries, hoping that we can learn from their excellent experience to solve domestic problems. These studies are basically from a theoretical point of view, and subjects are always concentrated in the government and the bank, fewer studies refer to the universities, even fewer research focus on the cost-benefit perspective from the four parts. At present, the income gap among regions and different groups of people is gradually expanding, as a means of narrowing the gap, it has become one of the focal point of social justice.This thesis is based on this topic, by collecting large amounts of datas and means of recursive deductive, the absolute and relative indicators index, it concluded that among the four parts, only the ratio of gains of students are higher than the costs ratio. Therefore, to achieve the development and expansion of NSL, costs of every part should be compensated by they gains.The first part of thesis briefly introduces the background and significance of topic, research status, ideas and methods, and the possible innovation and lacks. The second part is about the development process of NSL, the current situation and the plight of the analysis, lay the reality of the premise for the thesis. The third part introduce the cost-benefit theory first, then choose the indicators to assess the four parts'cost and benefit. The fourth part is to make the dissemination of NSL in Zhejiang Province as the subject, study the four parts'costs and benefits in quantitative analysis method, come to the net ratio of return and cost for the four stakeholders. The fifth part makes the overall cost ratio and revenue ratio on the basis of empirical analysis, and find a thorough way to increase the coverage of the NSL.There are two innovations in this thesis: one is that make the government and banks included in the cost-revenue analysis framework and the cost-benefit to be quantified to identify the interests of all parties to obtain and the costs to bear; the other one is that using questionnaire and face-to-face interview to analyze the demands from all parts, in order to provide guidance for developing an effective NSL policy.