Research On The Control Of College Financial Risk In China

As a result of the reformation of high education, college has functioned as a corporate entity. Endowed with more and more independency and rights of self-management, at the same time, college must assume civil liability independently. Market demands colleges to take all financial activities with the supervision of the government. They have freedom to make financial decisions such as raising fund, education appropriations, but just in here, colleges have to undertake some financial risks.Since 1999, college expansion has increased the number of college students greatly. Accordingly, the intrinsic resources of colleges can't meet the demands of the huge body of college students, and the result is the tremendous fund shortage that many colleges have to confront. However, the limited education input can never cover the huge capital gap, as a result, the conflict between the increasing capital demand and limited education input is becoming more and more remarkable. In order to relieve it, the government tries to increase the proportion of education input, and demands higher tuition within limits. But they don't work. So, many colleges resort to banks for loans. Unfortunately, the huge loans and shortage of education input make college operation even harder than ever before. The reality is harsh enough, but a lot of colleges just take it for granted, and haven't set up efficient system against financial risks. They continue to employ the old decision-making system, seem to be helpless to handle financial unbalance, investment failure, loan burdensome, and financial difficulties, which of course would harm the further development of college education. Facing the cruel reality, colleges must come up with relevant ideas and take efficient measures to reduce all these above challenges, otherwise, the outburst of the risks will definitely block the running of colleges. Now, the matters as the feasibility of investment projects, the capability to repay the loans, detailed analysis on financial risks and prevention system against financial risks must be taken into serious consideration by the college administrators.Based on the above facts, the thesis gives a brief introduction to the relevant theories of financial risk, including the definition of financial risk, its characteristic, various types. The paper will explore into the college safety difficulties in the course of financial management, give an analysis on the forms of financial risk and the reasons accounting for it. On the analysis the thesis points out the main representations of financial risks include financial unbalance, loan risk and college industry financial risk. In the end, the thesis would come up with some effective measures against various financial risks, thus hoping to contribute to the development of high education.