Economic Analysis Of The National Student Loan

Owing to the global financial crisis of higher education, the concept of cost sharing and cost recovery of higher education was accepted by nations all over the world. It is a tendency for student loans to become the main mode to provide financial assistance to higher education, especially for China, which is a developing country with scare higher-education resource. Therefore, it is both a theoretical and practical problem to analysis National Student Loan System (hereafter abbreviated as "NSLS") applying different economic theories.The thesis consists of four parts. In part I ,basic information about NSLS is introduced. In China, compared with commercial loans, NSLS refers to loans used only for expenses a full-time college student costs in a domestic university, whose interest is government subsided. Aiming at helping students in bad financial situation to finish college education, NSLS has dual features both as a financial product and a public policy as well. NSLS was initiated in 1999 and constantly perfected since then and consequently a framework, including key items such as creditors, debtors, loan management, risk management and so on, was founded. NSLS has widely taken positive effects on Chinese society, but it still has many shortcomings and reasonable solution to them is the precondition of its sustainable development.In part II ,different economic theories are applied to analysis NSLS accordingly. First, from the perspective of public choice, higher education is regarded as merit pubic goods, so is NSLS. A potential Pareto improvement area can be found based on Kaldor-Xicx compensation-test theory. Also, cost-benefit analysis indicates that such public projects as NSLS are always paying. Secondly, S-W model is applied to analysis the multiple equilibrium of NSLS market caused by asymmetric information and the possibility of financial collapse. It is also pointed out that the efficiency of NSLS can be improved by the interference of government. Also, Signaling model is introduced to analysis the signaling efficiency of NSLS. Thirdly, Partial —equilibrium analysis is applied to constitute the supply and command function of NSLS, based on which main affection factors are studied and the conclusion shows that imbalanced stimuli to banks and students, together with inadequate supply of valid institution, is primary reasons for the imbalance between supply and demand of NSLS. Lastly, the Analytical framework of institutional economics isintroduced to illustrate the impact of institution supply on the efficiency of NSLS, and consequently the thesis focuses on institutional arrangement and institutional environment that are indispensable for the function of NSLS.Part III gives a comparative analysis of international advanced experience in NSLS with regard to loan design, loan origination, loan application, loan repayment, funding sources, law-making and regulation-making as well. Also, how to draw lessons from those experiences concerning domestic reality is put forth.Based on the above-given introduction and analysis, a group of policy proposals such as enhancing the responsibility of government, improving product design, perfecting institutional environment and so on, are brought forward in Part IV.