China’s Private Universities Financing Channel Research

Through the unremitting development in more than three decades, whether it is from the teaching quality, scale and social influence, private colleges in our country have made good achievements. There are large teams of private colleges and some of them are well-known all around the country, such as Sanjiang University, Shuren school, Blue sky Institute etc. Their emergences have promoted the social identity of private colleges in China further. It is through their own continuous efforts, the private colleges have developed from a supplement to the public colleges to an indispensable part of China’s higher education. The vigorous development of the private colleges, not only broke the embarrassing situation of higher education resources in short supply in China, but also played an important role in the process that Chinese higher education moved towards popularization.However, there are many problems exposing while the development scale of private colleges in China is growing day by day. Such as low teaching quality, poor teaching environment, teaching equipment shortage, management more confusion, the characteristic isn’t obvious, the lack of funds and so on. Among them, the lack of funds and financing difficulties become an imminent problem for private colleges in China. And it’s also the most difficult problem to solve. There are many reasons for this problem, the most important is the financing channel of Chinese private colleges is too single. Private colleges have access to Government-funded is extremely rare. Bank loan approval for the private colleges is also very strict, and they cannot enjoy all sorts of preferential policies for interest like public colleges, the private colleges themselves lack a large number of alumni that have abundant financial resources, high social status and great social influence. Therefore, most of the private colleges funds are primarily by charging tuition. To solve these problems, we should learn the experience of successful financing of private colleges from other developed countries, coupled with China’s national conditions and our private colleges own conditions, and explore effective approaches to solve our own problems.This article first analyzes the nature of the private colleges. Private colleges belong to non-profit organizations which provide educational products that are quasi-public. In addition to the educated, the state and society are the beneficiaries, so the state and society have the obligation to the normal development of private colleges and provide help in raising funds. The paper then makes comparisons with American, Japanese private colleges from several common financing channels such as tuition, Government-funded, social donations, social service and assets operation, highlights the deficiencies in these several aspects. Finally it proposes solutions to the problem of financing difficulty of Chinese private colleges and suggestions from the aspects that the government increases funding, enhances social donation ability, issues securities, listing and financing.