Student Debt Remains Largely Foreign In China

Global China — By Joshua Barajas on June 5, 2011 8:49 am

By Joshua Barajas
For ChinaInFocus

An air of disbelief befell a classroom at Tsinghua University in Beijing recently when English and American Culture lecturer Jonathan Levine introduced what for most Chinese comes as a cultural news flash: The big debts that many young Americans pile up to finance their college educations.

“Education in the United States has become a financial albatross around students’ necks,” Levine, 23, later told a visitor after seeing his students become nonplussed during his presentation. Chinese students, he added, “find it difficult to understand how we can commodify something so critical to our success as a nation.”

The world of loans, interest rates and rising tuition costs is not entirely unknown in China. The Ministry of Education reported student debt from loan contracts totaling 52.41 billion RMB ($8.1 billion) since 1999. Yet according to the U.S. Federal Reserve, Americans have accumulated a total student loan debt of $900 billion, or nearly 111 times larger.

A few students in Levine’s class said they didn’t have student debt and didn’t know anyone else who did. One student offered the thought that the yuan equivalent of $14,000 was the highest acceptable amount of student debt in China. Another said $5,000.

Mark Kantrowitz, publisher of FinAid.org and Fastweb.com, reported in 2010 that the average college graduate in the U.S. accumulated about $25,000 in student debt by graduation.

Chao Zheng, a physics major at Tsinghua, said that even if Chinese students faced similar financial conditions in the U.S., college would still be considered a worthwhile investment. “Most [Chinese students] will choose to go [to college] because they believe education will make their life better,” Chao said.

In 1999, Chinese universities began charging tuition. Before that, the Chinese government handled the cost. The Ministry of Education instated a student-loan program the same year to assist poor students.

But debt, at least in some circles, is not a discussion point.

“Debt is rare in China,” said Nathan Yang, a civil engineering major at Tsinghua University. “Most Chinese students don’t have a plan on how to spend their money or fund their tuition and daily expenses. Only parents are concerned about it.”

According to China’s National Development and Reform Commission, tuition at a state-owned university could cost less than 5,000 RMB ($769) a year for a general major. Foreign language and medical degrees cost less than 6,000 RMB ($923) a year, whereas an art degree costs up to 10,000 RMB ($1,538) a year.

Yang said he lives comfortably with no concurrent job and no supplemental income. His scholarships and sporadic financial help from his parents allow him to focus solely on his studies, a fact that counters his lecturer’s college experience.

Levine, a Columbia graduate in 2010, walked away with a significant amount of debt and feelings of forlornness that found him in Beijing when Tsinghua University was one of the few potential employers that responded to his resume.

Surrounded by students near his age, Levine has the highest amount of debt in the classroom.

“I came to China because of the dearth of opportunities after I graduated,” Levine said. “All the harbingers of adulthood are on hold. It’s very dejecting to live with your parents when you’re 23 years old.”