Useless Diploma

The job market for university graduates in China has become stagnate. Up to one third of last year's 5.6 million university graduates are still looking for work while another 6.1 million students are set to graduate this year. The problem started back in the early 90's when the government ordered universities to expand in order to handle to growing number of students attending universities. The universities were told to borrow money from banks. The banks obliged due to the fact they were government owned. Having only two possible ways to pay back the debt, schools began to cut teachers salaries and materials were not ordered and some of the materials they had were sold. After they cut the cost, the classrooms were packed with students to increase the amount of money brought in by tuition. The problem then became that the students out numbered textbooks and materials. Universities became degree mills turning out diplomas just to get more money from students. Many universities remain in debt with no light at the end of the tunnel. Prior to the government bailing out one university, the annual interest payment was $60 million while the tuition received was only $30 million. Now it doesn’t take an accounting major to see that the balance sheet will be in the red. Until China is able to rectify this problem they will continue to have an increasing unemployment rate and many citizens with useless degrees.

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