Study Of Loan Risk Of Colleges And Universities

Since the late 90s of last century, the scale of higher education has been expand quickly, and to release the pressure of relatively shortage of educational resources, most universities have started a new campus construction projects to improve teaching conditions. But for the serious shortage of investment to higher education, colleges and universities began to seek bank loans to support the school career under the guidance of the government. Infrastructure loans eased the plight of fund shortage which came from the college expansion, and at the same time intensified the pressure on debt. This vast reservoir of financial risk, if the capital chain ruptures suddenly, universities will fall into financial crisis and even lead to a series of social problems. So how to measure and to avoid higher financial risks is an urgent issue need to be studied.Based on the basic concepts of risk, this article analyzed the risk of loans to colleges and universities combined with the concept and nature of higher debt. We build a risk assessment system for the loans of colleges and universities to forecast the financial risks which universities may be faced and propose the risk control recommendations. In order to strengthen the normative behavior and management of college loans, the most important thing is to strengthen the management of college loans. On the one hand, we should clear direction for the use of loan, improve fund use efficiency, strengthen the financial budget constraint and increase awareness of financial risks; on the other hand, we should broaden the financing channels, make efforts to increase revenue and use various means to raise education funds.This article based on the reality of university financial management; give a systematic analysis on the risk of college loans and conclude a serious of approach to reduce the risk of college loans. Combined with instances of a domestic university, provide some suggestions and ideas about how to raise the level of university financial management and sustainable development.