Education authorities are confident the problem of skyrocketing debts at universities and colleges can be solved, a top official said yesterday.
The central and local governments will increase budgets for higher learning institutes to help them pay back debts that are mainly generated by infrastructure projects, Minister of Education Zhou Ji said.
"We have also got support from the banking sector which agreed to turn some short-term loans into long-term loans," he said.
With the help of local governments, universities have taken a series of measures to pay their debts, such as developing real estate on their campuses and enhancing fund management to reduce costs, Zhou said.
"We are confident of solving the debt problem in cooperation with local governments," he said. "Universities are urged to introduce better management and operational methods."
For example, Jilin University in Northeast China's Jilin Province is taking a series of measures to reduce its debts.
"Jilin University has a big campus and could pay off its debts through land replacement," Zhou said.
Following mergers with several universities and colleges in recent years, Jilin University has more than 60,000 students and debts of more than 3 billion yuan ($400 million) because of expansion and construction.
The university issued a notice online in March asking for suggestions on how to solve its financial problems saying it was on the verge of bankruptcy.
The total debt of public universities and colleges has reached more than 200 billion yuan.
The country's top advisory body, the Chinese People's Political Consultative Conference National Committee, called in July for the issue of national treasury bonds to help ease debts.
Universities want to enroll more students to collect more tuition fees. This could lead to further expansion and debt, a vicious cycle, experts have warned.
Enrollments have risen rapidly since the central government launched a student-recruitment campaign in 1999.
Universities enrolled more than 5.4 million students last year, about five times the number in 1998, according to Ministry of Education statistics.
Annual college tuition has leapt to more than 5,000 yuan, about 10 times what it was a decade ago.
"Financial crises are universal problems for universities during their expansion," Xia Jiechang, from the China Academy of Social Sciences economist, said.
"Improving higher education through taking out loans is necessary," he said.
Source: China Daily