Student loans repayment in China: Designing a new model to ease the repayment burden

Hua Shen, Hong Shen, Adrian Ziderman

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

The relatively short repayment periods of four or six years after graduation under the Government-Subsidized Student Loan (GSSL), the main student loans programme in China, has, since its implementation in 1999, imposed considerable hardship in repaying loans. This paper presents a new diversified repayment model, the 'geometric proportion repayment' model in which the repayment ratio is kept within 10 per cent of income, thus both easing the burden of repayment and reducing subsequent default. The results of an ordinal regression model, based on data from a sample of university graduates, provides a method of estimating the (unknown) salaries of graduate borrowers on the basis of known information of their work/employment situation.

Original languageEnglish
Pages (from-to)281-290
Number of pages10
JournalHigher Education in Europe
Volume34
Issue number2
DOIs
StatePublished - Jul 2009

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