Empirical Study On Influence Factors Of College Student Loan Repayment Willingness Of Graduates

Since1990s, higher education has gained a great development in China. Meanwhile this results in increasing of tuition fee, which lays a big obstacal for Poverty-stricken college students。Under the background, national student loan takes effective, which is applied in1999and amended extensively in2004. The interest of loan is offset by national fiscal income subsidy, which helps students with economic difficulty complete studies smoothly.Along with employment of first batch of college students with loan in2003, the problem of loan repayment arised gradually. Current repayment ratio stays at80%with large loan loss every year, which caused a huge loss for national finance and banks who are vouching for the student loan. Conversely, this leads to inactive loan issue as well as over-strict audit.Repayment problem becomes bottleneck of student loan policy, restricting the application and blocking the sustainable development. Unfortunately, loan demand keeps increasing all the time. To deal with the contradiction, methods are looked for in every country. In developed countries, students will be sorted based on different standards in policy making, including lowering actual interest rate while connecting personal tax revenue with repayment, or setting special institution to manage the loan and applying guarantor system. In developing countries, lowering loan interest and extending repayment period are usually adopted in order to avoid loans in arrears.In current student loan policy of China, it is clearly stipulated loan interest is subsidized by the state during student’s studying time in college. For first2years after graduation, loan principle can be unpaid but with interest paid. From third year, principle must be fully repaid with corresponding interest within6years, based on commercial bank benchmark interest rate. For developing countries, they prefer to defer the first repayment, extend total repayment period, apply extremely low interest rate or get third party involved in loan audit and issue and help in students employment, guaranteeing repayment capability of students with loan. In China, measures like deferring principle repayment time to third year, enhancing communication between bank and college are taken to ensure on-time loan repayment. Recently, loan within students’ local area plays a more and more important role in student loan policy. This kind of loan requirers parents of student to be loan guarantor, adding relatively permanent home address and contact number and radically avoid not timely repayment because of students’ job change or some other reasons.Among all the elements affecting repayment, the employment status and stable work of students with loan are most critical ones. This paper is based on interview (conducted by focus group) of new graduates with different family background and college experience, analyzing their employment ability, work location, work industry, as well as salary to estimate the students’repayment willingness.In addition, by interviewing students with several working years who ever had loan, about repayment problems as well as effects to their jobs and life, this paper re-consider s ways to improve student management and loan service.Lastly, based on interview content and advanced experience abroad, this paper brings forward proposals to consummate student loan system, improve repayment willingness and guarantee sustainable development of student loan policy.