The borrowing mindset: understanding student's intension to apply for study loan across China

Purpose In view of the paradox of “unwilling to borrow” and “excessive borrowing” coexisting in student loan decision-making under the background of higher education cost sharing in China, this study aims to break through the traditional linear hypothesis, exploring the possible nonlinear mechanism between perceived economic burden and loan application intention. Design/methodology/approach This study conducted a questionnaire survey on 320 college students in Hubei (n = 150), Guangdong (n = 85) and Gansu (n = 85) to examine the impact of perceived financial burden (PFB), expected return on education (ERE) investment and perceived policy attractiveness (PPA) on loan intention by using a multiple linear regression model. Findings The inverted U-shaped relationship between PFB and intention to apply for student loans was validated by this study. When the burden is at the medium level, the student loan intention is the highest. When the burden is very low or very high, the intention shows a downward trend. The ERE investment and the perceived education policy attractiveness show significant positive effects. Descriptive analysis shows that although the effect of regional differences is limited, the PPA is the highest in Guangdong and the lowest in Gansu. The gender difference was not statistically significant. Originality/value This study systematically verified the nonlinear mechanism of key psychological variables in student loan decision-making in the Chinese context, expanded the application of “planned behavior theory” and provided new empirical evidence for understanding “bounded rationality” in decision-making. The conclusion provides a key micro empirical basis for promoting the student funding system from “economic support” to “precise empowerment,” that is, implementing hierarchical intervention, optimizing policy design and formulating differentiated regional strategies according to the threshold of students' psychological burden.