Research On The Prevention And Solution To University Loan Risk

Since 1999, colleges and universities have enlarged their enrollment, and the size of universities is also rapidly expanding. The demands for all kinds of investment are also increasing. There is a contradiction between the inadequate fund and the needs of career development. To ease the contradiction, universities have to borrow more and more money from banks, and many universities are operating in debts. Timely and appropriate loaning has solved the problem of the bottleneck of capital shortage in universities' development.Universities must pay interests for the loans, which requires the evaluation of the capability of profit-making and debt-paying. When universities borrow money, they must take into account the construction and development and whethetr they are able to timely pay off their debts. Loan financing has changed university capital structure. Because of heavy debts, financial revenues and expenditures are affected, and there is the risk that universities are unable to pay due loans.Besides, many problems have emerged in unvesity loaning, so it is urgent for universities to be conscious of the risk and prevention in loan financing. At the same time, relevant agencies should also be responsible in policies and countermeasures to help universities guard against potential risks.In this paper through various case studies we analyze the status quo of college loans, risk prevention and solution, and offer some ways of prevention and solution to ensure the health development of universities.