An Empirical Study On The Default Problem Of Student Loans

The National Student Loan is a major financial instrument in China to assist education?It is also an important part of General Secretary Xi Jinping's strategic plan for national financial poverty alleviation.The National Student Loan is a financial policy that led by the government,financed by the financial department,organized by universities,and operated by banks to help students with financial difficulties to complete their higher education.This policy includes two parts: student loans at university(student loans at school)and student loans at home.The importance of student loans can be studied from several perspectives.To the borrowers,the National Student Loan helps tens of thousands of students to complete their higher education and prevents many families from going into poverty due to unaffordable tuition fees which is an essential part of poverty alleviation.To the schools,the National Student Loan provides more opportunities for students and relieves the financial pressure on the universities because of their limited amount of funding.To the banks,the National Student Loan expands its business scope and enriches the customer groups,providing a potential source of profit.To the country,the National Student Loan is a strong economic foundation for the construction of talent teams.However,the national student loan often shows a higher default rate,higher risk,and more difficulties in repayment given the following circumstances.These factors are: the nature of the National Student Loan is credit loan,applicants are often from low-income families,and the lack of management experience and related policies since China only implemented a student loan policy from 1999.The higher default rate not only brings in the operational risks to the banks but also,in the long run,makes the applicants who need the financial aids lose access to the loans and thus affects the overall performance of higher education training plan.How to effectively prevent large-scale default of student loans,therefore,is a topic worthy of further study.The dissertation reviews both local and foreign literature and uses a variety of research methods and field investigations comprehensively.It analyzes the reasons of student loans defaults from the perspectives of four participants: government and society,banks,colleges and individuals,and uses SPSS software to analyze the factors affecting the student loan default by conducting a empirical analysis of data from G bank.It is believed that the personal factors and family factors of students,and the design of bank loans all posted side effects on student loans.Through further factor analysis,the six different new variables have different degrees of influence,while avoiding the problem of multiple collinearities among the original variables.According to the analysis and research results,this article also gives several suggestions for the participants of student loan.This dissertation aims to reduce the post-loan default rate of the student loans so that this favourable policy can be developed in a long-term and lasting way,assist more students and families out of poverty,and help the society to obtain more talent resources.