College Loan Risk Prevention.doc

College Loan Risk Prevention Abstract: College financing through bank loans are the main way to colleges and universities, pointing out that some of the measures to prevent risks.  Keywords:: higher education; loans; risk; prevention  The author believes that the current college credit risk circumvention measures the following points.  A debt ratio of the principle of reasonable  Loan amount should be appropriate, there must be a certain proportion of own funds on condition, in general, rational allocation. Most of the purchase of liquid assets by current liabilities raised, but partly by long-term debt to raise; fixed by long-term own funds and most of the long-term debt to raise, that is, all current liabilities is used to raise liquidity, equity financing to be used entirely fixed assets, this is a normal capital structure type. The accumulated surplus in the balance sheet is in red, indicating a loss of part of the equity capital has been eaten, and thus the proportion of the total equity capital fell, suggesting a financial crisis. Losses eroded the total equity capital, but also eat up a part of the debt, this belongs to insolvency, measures must be taken. Debt ratio is reasonable, can minimize the financial risk. That is to avoid excessive lending affect normal school finance loan payment and loan repayment can not be scheduled principal and interest.  2 must adhere to the “Who’s loan, who is responsible for” the principle of  Loan capital project management, accountability, responsibility to the people, the concrete implementation. Some colleges and universities means less risk of the loans, repayment responsibility for meaning is not strong. That colleges and universities belong to the state, and do not have the national census drawn on the loan to finance. Loans for college as an independent civil subject, in civil activities, must bear civil liability. Principal institutions of higher learning is the legal representative of institutions