1
Since the central government issued the double reduction policy (reducing the burden of homework and off-campus training for students in the compulsory education stage), the standardized management of K12 training institutions has won the hearts of the people.
It not only avoids the repeated investment in education, excessive internal volume, but also reduces the educational burden of parents, and can also give students more time to play a creative specialty, which has a positive effect on improving the overall happiness of society, and even the fertility rate and thus affecting sustained economic growth.
Extracurricular training is moving from disorder to order, but one of the bubble risks is still worth paying attention to... The fundraising behavior under the prepaid payment, the financial bubble accumulated by the loan credit, and the resulting risk of running away from the loan.
Recently, the Ministry of Education and other six departments jointly issued a policy document, namely the "Notice on Strengthening the Supervision of Pre-fees for Off-campus Training Institutions".
The Notice makes clear requirements for the pre-fee cycle and pre-fee fund management of training institutions, but three of them are related to credit.
One. Training for primary and secondary school students shall not be paid by means of training loans.
Two. It is not allowed to grant credit or carry out business cooperation to off-campus training institutions that have not been approved and filed as required, do not have relevant qualifications and conditions, and have violations of laws and regulations or major risks and hidden dangers.
Three. It is forbidden to induce parents of primary and secondary school students to use installment loans to pay for off-campus training.
What does that mean?
That is, irregular off-campus training institutions are not allowed to expand school buildings and develop business through loan financing, the training fees of primary and secondary school students must not come from loans, and it is forbidden to induce parents to use installment loans to pay tuition fees.
In the past few years, when off-campus training was hot, training institutions leased new classrooms, recruited new employees, developed new businesses through a large number of bank loans, and joined forces with some financial institutions (there are banks and online loan platforms) to carry out training loans or installment loans, so that parents who cannot afford to pay tuition fees at present can pay tuition fees through loans, and thus accumulate a lot of financial risks.
If some training institutions run away with money (in fact, they have already appeared), not only can the training not continue, parents must continue to bear the pressure of repayment, in addition to causing certain financial systemic risks, but also brewing social instability... Especially at the moment when off-campus training is strictly supervised, the cases of volume running away are on the rise.
The sooner this bubble of off-campus training is punctured, the better.
2
When it comes to bubbles, the one we can best understand is asset bubbles.
For example, the stock market or the property market, when its price continues to soar, much higher than its value (for the house can be understood as a monthly payment is much greater than the rent, for the stock can be understood as dividend income is much lower than the interest on bank deposits), we will say that there is an asset bubble.
How does a bubble form? Bubbles are made up of money.
When everyone takes money to chase a certain target, whether it is house stocks or calligraphy and painting tea, whether it is commodities such as kerosene vapor or virtual products such as futures digital currency, or even meat, eggs, fruits and vegetables that are consumed daily, as long as the inflow of money gathers and a large number of people buy it, it will cause a bubble.
But many people understand that money still stays on savings deposits, their own funds, in fact, there is a kind of money that many people have ignored, but its power is greater... That's the loan.
Whereas people's savings are generally capped and take a long time to accumulate, loans are completely different.
The current loan is a number symbol, it is lent through the bank, theoretically there is no upper limit to the loan, and it can be created in a very short time... You go to the bank to borrow 1 million, which is a matter of doing a formality in a few days (think about whether this is the case with a mortgage), but if you are asked to save 1 million, the difficulty is not just an order of magnitude.
If these loans are redirected to a certain area, the accumulation of bubbles is certain... That's how the real estate bubble builds up.
Everyone thinks that the bubble is accumulated by rich people, but in fact, the bubble is accumulated by people without money through loans. This was true of the 1997 Asian financial crisis, the 2008 global financial crisis, and the real estate bubble.
Originally, the out-of-school training applied parents' own funds, at this time the funds flowing into the training industry are still limited, but once parents who do not have the ability to pay can take out loans, the funds flowing into the training industry will soar, and the new "Notice" issued by the Ministry of Education is to prevent the flooding of the education and training bubble in advance.
In fact, it is not only off-campus training that has blown bubbles through credit over the years.
What if I want to study an MBA and don't have money? You can do an education loan; what if you want to become beautiful and have no money? You can get a medical loan; what if you want to travel without money? Can do a travel loan ah...
And these loans have limited pull on the economy (car loans/decoration loans, etc. can pull a longer real industrial chain), and the returns are difficult to quantify (loans to open factories and stores can be clearly quantified), and it is easy to accumulate bubbles.
In fact, this is also the risk of excessive financialization of society.
3
Regarding the financialization of society, everyone's feelings are already very deep, but I don't know how to express it.
The barber shop downstairs recharged the card more preferentially, so it was charged 1000 yuan; the bakery in the mall recharged the card discount lower, so it was charged 1000 yuan; the restaurant recharge card that often dined also gave an additional stored value, so it was charged with 2000 yuan; the beauty salon / gym can not always go to pay once, what to do? Recharge ah, so another 10,000 pieces.
On the surface, these are all real enterprises, but this operation is actually the behavior of financial enterprises... It is a fundraising act. I thought it was playing industry, but in fact playing finance.
This pre-sale and prepaid business model has amplified the operating leverage, blown up the financial bubble, and buried hidden risks out of thin air.
Originally, everyone should use their own funds to consume, and merchants should use their own funds to operate, but once they can borrow leverage, it is completely different.
Consumers can swipe credit cards/online loans/bank loans to consume, and it is prepaid, that is, the money has been paid before consumption. In addition to being able to borrow bank loans to expand their operations, operators can also raise funds through the pre-fee model to expand their operations.
In other words, consumption has been artificially magnified, market demand has been artificially magnified, and operating investment has been artificially magnified... It is always with the help of leverage that society is over-financialized.
Once the subsequent overdraft cannot continue, the leverage can easily break ... Consumers are over-consuming and heavily indebted, and operators are over-investing and heavily indebted, which eventually evolves into financial systemic risks and makes the whole people pay the bills.
K12 education and training strict supervision is part of the social deleveraging and de-financialization, and it is not allowed to use loans to pay training fees, not to induce the use of loans to pay tuition in installments, and not to use loans to expand business is an important means to prevent the bubble of education and training.
If the off-campus education and training has gathered a lot of money, if parents have invested a lot of money in off-campus education and training, if the bubble of off-campus education and training is blowing bigger and bigger, once the bubble bursts... Educational institutions, parents, students, and even society will pay a huge price.
In fact, not only off-campus education and training institutions, but also any pre-sale, prepaid business model of enterprise institutions (in addition to the barber shop/ beauty shop / gym mentioned above, real estate mortgage prepayment needs to be strictly supervised) should be subject to supervision to prevent funds from being diverted for other purposes, to prevent the use of prepaid funds to leverage higher leverage...
Off-campus training this bubble well! I hope to make a good start and make a model template for other prepaid businesses.