Title: “Loan + Insurance”Model: A Market- based Approach to National Student Loans
Abstract: The national student loan mechanism is the primary means to promote educational equality and to provide financing to poor students. Up to now,national student loans are provided mainly by policy- sponsored financing with commercial loans as an auxiliary method. The loans are provided through two channels,home- based loans and campus- based loans respectively,and have the China Development Bank( CDB) model and the commercial bank model. However,the mechanism has several defects,such as gaps in coverage,low efficiency,post- loan management difficulty and lack of market- based operation. By integrating the insurance mechanism into the commercial bank model innovatively and bringing the commercial banks,insurance companies and educational organizations into one unity,such a new model has being practiced for several years,and has been proved as a promising and practical approach to improve the efficiency and effectiveness of the national student loan system. The Institute of Finance and Banking of Chinese Academy of Social Sciences has conducted a comprehensive research on the Loan + InsuranceModel. Researchers visited banks,higher educational institutes and insurance companies,and applied international comparison methods to get a firm understanding of the status quo,operational model,operational results and related risks of this new model. They arrived at the conclusion that this new method was a helpful experiment for market- based operation mechanism for national student loan system and at the same time it required broader practices and deeper reforms to overcome various mechanism hurdles and practical difficulties.
Publication Year: 2014
Publication Date: 2014-01-01
Language: en
Type: article
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