Study Of The National Student Loan Securitization

It has been 8 years since our national student loan started in 1999. Currently, the student loan policy is bidding, financial and risk allowance. However, it is inevitably that the government's goal conflicted with commercial banking due to student loan aiming at welfare and running by commercialization. Therefore, student loan securitization is proposed to solve this hard problem. Student loan securitization is a financial innovative tool which can decrease the liquidity and operational risk of commercial banking, increase the capital utilization and alleviate the fiscal and college's burden; can improve the capital structure by the combination with the monetary market and capital market; will accelerate the development of our college education significantly.Firstly, this paper outlines the concept and significance of asset securitization and analyzes whether the student loan securitization is feasible or not in the current situation. Due to the student loan's special property, the necessity of student loan securitization is discussed from three points-commercial banking, college and the government.Secondly, because of our specific market and system, student loan securitization is different from other credit asset securitization. However, we can use their successful experience to design the operation model for student loan securitization, such as the special purpose vehicle, credit classification and credit enhancement.Thirdly, how to pricing for student loan securitization is one of key points in this paper. The essence of the asset securitization pricing is the discounted future cash flow, which is to consider the issue of the prepayment model and the discount rate. This paper introduces the two-factor CIR interest rate term structure model and refinancing prepayment model, PSA (Public Securities Association) model to pricing for student loan securitization.Finally, as the difficulty of obtaining data, it can no longer use an empirical study, but the Monte-Carlo simulation to verify the reasonability in the paper. To guarantee the success of student loan securitization, the direction in the later study and improvements are pointed out according to the current financial market.