Our University Loan Risk Prevention And Countermeasure Research

In recent years, increasing enrollment expansion in higher education has led to a rapid expansion of schools, a sharp increase of input in every aspect. There has obviously been growing imbalance between supply and demand-education appropriations and education funds needed in the growth of colleges and universities. In order to alleviate the acute problem, a higher proportion of large colleges and universities address the increased funds "bottleneck" through long-term,big bank loans. It has become a common practice to run colleges and universities with debts. In a sense, the modest bank loan has positive effects on the development of colleges and universities. On one hand, it can help successful completion of enlargement tasks; on the other hand, it can promote the healthy development of the education cause. In addition, it has opened a new business channel for bank credit business. But in reality, many colleges and universities borrow bank money without rational analysis, and banks also grant loans without careful consideration. Blind and excessive bank loans will inevitably put higher schools in a serious debt crisis, creating unfavorable situation for higher schools' development. At the same time it will also bring more financial risks to banks.In this paper the author starts with introducing some basic concepts of risk, and then analyzes the risk of loans, the risk of loans by higher schools, together with such issues as the concept and nature of higher school loans, the actual situation of China's colleges and universities and the era characteristics at the intersection between 20th century and 21^st century. Based on the above analysis, the formation of higher schools' financial risks and the conduction mechanisms are mainly discussed. The paper takes a university for example, makes use of related financial index to make risk assessment. Finally, the paper gives some suggestions for preventing and controlling financial risks with three parties-higher schools, banks and governments all involved in taking measures. This will be significant for the reasonable using of the finance for new campuses, the smooth progress of construction projects and the sound development of higher school education.