A Study On Sustainable Development Of Student-Origin-Based Loans

Student-origin-based loan is in full swing, and its policy flux is replete with multi-games. As question, policy and politics "streams" assembled, the new policy window opened gently in 2007. With this is a watershed, it has undergone The Rural Credit Cooperatives Period and China Development Bank Period. Thereinto, China Development Bank model has been the chief form of National Student Loan. It has bright Chinese characteristics, while international experience also has model significance and enlightenment to its sustainable development.It has been designed with more innovation than National Student Loan in campus, and the comparative advantage is obvious. However, the contradiction of supply and demand is quite outstanding still. Various hardships are still barged up against in carrying out the policy. This is because of institution itself as well as the effect and restrict from the outside factors. According to the investigation and questionnaire survey in Gansu, Hubei and Hunan province, the study found out that student-origin-based loans have become "the 2nd finance" to loans students; middle school graduates, population of student original area, employees in rural areas, the net per capita income of rural residents and per capita GRP displayed a significant correlation with student-origin-based loans scale; but the willingness of bank lending is the major determinant of loan supply, and that "planned economy color" of examination and approval in loans is still strongly.The outer-cause of sustainable development in student-origin-based loans includes economic environment, social systems and cultural background. Thereinto, economic situation of the household reflects students'demand for loans, and the willingness of bank lending is the major determinant of loan supply. Such phenomenon as "Supply determines demand" is very obvious, which rests with that market mechanism is as sound as a bell. Therefore, less governmental intervention and control is required, so as to create an outside environment fit for marketization, improve the motivation and creativity of banks, and promote the development of diversification. The social system restraints mainly include the imperfect legal system, improper administrative interference, etc. Inadequate credit culture atmosphere is a crucial ingredient of the culture background.The lever principle plays a key role in actual operation of student-origin-based loans. From the angle of macrocosm, the central government uses financial and monetary leverage to increase investment in higher education efforts of "the rich", local government, students and their household, so as to ensure participation in higher education of local finance and household, meanwhile, fulfill lever effect such as "light pull heavy". Student-origin-based loans involve students(household), bank, government, colleges and universities, etc. There are dynamic games among the multi-interest groups. More market mechanism should be introduced so as to achieve the equilibrium of the games.The practice of this programme in some provinces has shown that both its aid effectiveness and exciting function are obvious. The author advances that educational production and signal function exist simultaneously, just like "wave-particle dualism" in the physical world. Student-origin-based loans can promote the accumulation of human capital and enhance external signal as well. So the transition of human capital is brought about, and loans student might be able to break away from the secondary labor markets.The thesis studies the path to realize sustainable development of student-origin-based loan mainly from three aspects.The first is idea and culture. The concept of marketization, diversification and so on ought to be aggrandized. The financial ecologic environment ought to be continually optimized. A credit culture must be built and promoted energetically. Honesty and credibility education must be strengthened, and humanistic thought ought to be established. China Development Bank should not only do better to accelerate the pace of financial innovation and market development, but also pay more attention to the people's livelihood and human development in the strategic positioning.The second is system design. The government and CDB should break through the restraint and disadvantage in current social system, strengthen the legal system construction, perfect the operation and management procedures, speed up the construction of Center for Student Assistance. Above all, more market mechanism such as insurance, guarantee, securitization, etc. must be introduced. So that the loans can recover as scheduled, cash flow can achieve a virtuous circle, default and bad debt loss can be controlled, the catenary of financial ecology can running without interrupt. Furthermore, the bank ought to draw up its border with governments.The third is the sustainable development of economy, which is the foundation of sustainable development of finance. Only the economy flourish continuously will the disadvantaged groups be able to improve their income level, will graduate students have enough income to be used in repayment, will financial investment in public education and government subsidy in student-origin-based loans continue to increase, thus may the coverage of loans and opportunity equality of higher educational entrance be increasing.