University Credit Risk Study In The Background Of Greatly Expanded Enrollment

In the past decade, general higher education in China expanded rapidly, and the higher education transferred from the"elite education"to the"general education". During this transition, it naturally requires huge amount of construction capital. As the financial support from the government is limited, this big construction capital shortfall of the higher education cannot be solely balanced by tuition. In order to continue expanding and improving higher education, borrowing money from bank became an important way for getting funding.While borrowing easy money from bank improved the university's financial operation conditions, it caused problems of university over-expansion and construction over-luxury. The money universities borrowed was far more than they could offer. The credit risk is a huge problem for universities. How to control and prevent the universities from over debts is very important for them to continue to growth healthy.This paper starts with the background of rapid development of China's general higher education, and uses general universities as a sample. The current situation of university's debt was presented, and the related problems were discussed. It summarized the university various credit risks, the reasons of having those debts. Learning from the lessons from other countries, this paper proposes some specific ideas from the point of views of government, university, and bank for controlling and preventing the university's debts.