(Yicai Global) April 27 -- China has the world’s largest university population—at 40 million students—meaning one of every five students in the world attends a university in China. Due to this staggering number, most people around the world would assume that China would therefore also have one of the greatest student debt crises. But while student debt continues to affect the majority of countries, China has managed to mostly avoid this issue, particularly when compared with British or Canadian students.
Perhaps the most striking comparison of all is student debt issue in America versus China. In an article from Forbes, the average cost of tuition per year in China is exponentially less than in America as a result of heavy government subsidies funding Chinese universities. In addition to these subsidies, there are several key factors that keep China from having a student debt crisis as compared to other countries.
Top Universities are Public
One of the most obvious reasons that student and that is not a particularly pressing issue in China is that the top universities in the country are public. Many of the top universities in China, like Tsinghua, Beijing University and Fudan University, are public schools and therefore affordable for a majority of students. Unlike in other countries—like England where the cost of attending top universities like Oxford University or Cambridge University will be extremely costly—receiving an education at a top university in China will not require students to apply for significant student loans.
Students have more options to finance college education, as fees in China are relatively affordable for a majority of Chinese families. Instead, having the chance to attend a top university at a reasonable cost has led Chinese students to increase university enrollment on a national scale. The proportion of enrolled Chinese students in college aged 18 to 22 years old has skyrocketed from less than 2% in 1978 to 40% in 2015. With increasing developments in higher education and expenditures by the government, Chinese officials anticipate this number to reach 50% by 2019. This may be partly due to the fact that students have a fair opportunity to attend the top universities, no matter their financial situation.
The Job Marketing is Expanding
Including all demographics, the number of graduates in China has quadrupled over the past 10 years as a result of the availability and cost of attending university. For several years, the job market was unable to fully catch up with this massive inflow of workers with new degrees. Reports showed only 78% of graduates were able to find positions within a year, and this was including graduate students, freelancers and temporary or seasonal workers all in one category.
However, China’s wage growth has already risen by consequence of the countries recent economic prosperity. In combination of greater national wealth and low debt after graduation, there have been many startups that have gained traction and targeted educated graduates. These types of opportunities for recent graduates to invest in diversified assets rather than paying off student debt will likely lead to long-term prosperity for China.
With top universities being public and the expanding job market, China has been successful in avoiding the student debt crisis that is currently affecting many countries and recent graduates entering the global workforce.
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