Is Publication of Student Default on Student LoansAcceptable?
Different from usual loans given to businesses, thestudent loan is strategically designed to helpimpoverished college students finish their studiesand hence promote the sustainable andharmonious development of educational qualityundertaking. While we expect that college debtorswould keep their promises to repaytheir loans, it is reported that many graduates have beenput in the black list publicizing detailed information of students defaulting on student loans.Undoubtedly, those debtors would suffer from immediate humiliation and other potentialcredit risks.In the point of view of both banks and college debtors, the publication of studentsdefaulting on student loans is justified and hence acceptable in the following aspects:
Firstly, articles concerning the publication of students defaulting on student loans have alreadybeen adopted in the 2004 version of Suggestions to Perfect Student Loans Program by theauthorities. It is stipulated in the third part that students defaulting on student loans will bepublicized in news media and ChinaHigher-education Student Information Website. Whenthose students apply for student loans, banks and cooperative universities inevitably haveinformed any detail relevant to the application, the repayments and consequences of failureto repay loans. Without mutual agreement between banks and debtors, banks would not takethe risk of providing loans to college students. As a result, once students have signed theirnames in their agreement with banks to repay loans in time, banks are entitled to take anymeasure stipulated in their agreements in case of students’ failure to repay their loans. Is itreasonable to accuse banks of intruding those students’ privacy but not renouncing thestudents’ violation of loan agreements?
Secondly, the publicization would lead us to think over the possible consequence of bad creditrecords. The publicizing students’ default on student loans indicates that their violations mightbe recorded in theindividual credit information database established the People’s Bank ofChina. Once their bad credits have been input to the database, it is likely that those studentswould have difficulties in applying for loans and credit cards in their remaining lives. Forexample, when those students decide to apply for mortgage loans to purchase real estate,their application would be declined by banks due to their bad records in the individual creditinformation database. Given those potential consequences of bad credit records, I think moreand more people will not dare to try it out. In a sense, the publicization would contribute tobuilding an honest society.
In sum, as college student debtors and banks have signed agreements concerning repaymentof the loans, banks are entitled to publicize graduates’ default as is stipulated in theagreements. The publicization also helps build an honest society. Therefore, the publicization isnot only justifiable but also acceptable.