The Risk Appraise And Prevention Of Loan Of Colleges And Universities

With the establishment of socialist market economic system and the development of higher education in China, colleges and universities have entered a hypernormal development stage. During this stage, the size of colleges and universities has been enlarged, educational quality has been improved, and achievements have been obtained gradually. The continuous enrollment expansion of students in colleges and universities has developed quickly since 1999. The numbers of students in universities and colleges increase from 6,430,000 in 1998 to 16,000,000 in present. The expansion of students pulls the educational consumption, and bring an opportunity for colleges and universities to develop. The development of higher education will make great contribution to the construction of national economy and improvement of quality of people. The private colleges and universities become trend of future form of universities and colleges in China. The dominant management notion of higher education is transiting from pure affair management to the combination of business operation and affair management. The needs of professional people make the colleges and universities transfer from"seller market"to"buyer market".Confronting with the unprecedented expansion speed and fierce competition, most universities have to expand and rebuild campus to satisfy the requirement of rapid expansion. The enrollment expansion will inevitably result in the severe insufficiency of infrastructure and an urgent large-scale investment, while the government supports universities only in respect of policy and cannot give enough funds. Therefore, there is usually a financial difficulty in the universities and colleges. At the same time, the management in universities and colleges invest large capital to improve and add educational infrastructure so as to gain scale advantage and competitive advantage. As a result, great gap in finance supply of universities is formed and the phenomenon of running the university with loan occurs in many universities, which further increases the financial difficulties of universities and makes the financial crisis prominent. However, loan is a double-edged sword, it brings great financial risk to common universities while enhancing their educational strength and alleviating their financial stress. Therefore, how to measure and avoid loan risk of common universities becomes an important concern for financial managers of common universities. The article consists of four parts:First, The author mentioned risk of loan in universities. This part introduces the basic meaning of risk and the concept and characteristics of financial risk, and defines the concept and classification of financial risk of universities and the structure of risk of loan respectively.Second, The author introduced the emergence and harm of risk of loan. The author analyzed the defenition and the components of risk, and deduced the internal and external reasons resulting in the risk of loan. Also, the author analyzed the potential harms resulting from the existence of risk.Third, The author evaluated the risk of loan. The author analyzed the model mentioned in Control of Loan Limit and Risk Assessment Model in Normal Higher Education Unversities or Colleges, which is issued by Education Department and Financial Department in July, 2004. and on the other hand, The author pointed out evaluation index system of risk of loan rom the perspective of macro management.Forth, The author introduced the control approaches and prevention measures of risk of loan. The loan business for universities exerts an influence on universities, banks and government. The author brought forward prevention measures against the risk of loan from the view of educational authorities, banks and universities.