ABSTRACT
If we admit that the introduction of a cost-sharing mechanism in the early 1990s broke the single mode of government-funded financing in China, then we must admit that bank loans have successfully diversified the financing channels for Chinese HEIs after enrollment expansion. Bank loans have become the third major financing channel for Chinese HEIs following government funding, tuition, and fees. Thus, the capital market became another major capital supplier for higher education following the government, student families, and corporations, through providing loans to higher education students and HEIs. An increasing dependence on the capital market may be seen as another major characteristic of China’s higher education financing system in recent years. In terms of studying the financing of China’s HEIs, one must clearly learn about the loan situation at these HEIs, analyze the factors determining the size of the loans they receive, and determine how HEI loans are assessed for risk. On this basis, this study first introduces the characteristics of HEI financing
and specifies the analytical framework that it will follow. It will then, on the basis of this framework, make a deep empirical analysis with regard to the financing selection mechanism of Chinese HEIs, their loan situation, their financial operation characteristics, and the correlation between the size of HEI loans and HEIs’ financial operation characteristics. Finally, this study will consider the policy implications of its conclusions on HEI financing, which it will have drawn from its research results.
