SPAIN: Strong take-up for student loans

More than 3,300 graduates have applied for one of Spain’s new student loans, less than a month after the scheme was launched. If successful, the applicants will receive more than half of 6,000 loans the Spanish government is making available for the first year of the scheme – out of a total loans budget of €50 million (US$70.72 million).

Students who have finished their first degree in the past two years will be able to apply for loans of a maximum of €22,800 to study for a master’s degree at a Spanish or other European university. Echoing models adopted in Britain and Australia, recipients will only start repaying loans when their income exceeds €22,000 a year.

This is a very reasonable salary in Spain where many young people – known as the mileuristas – typically work for just €1,000 a month.

The conditions of the loan are generous in other ways: all loans will be interest free and, if recipients’ salaries drop below €22,000, they can temporarily stop repayments. Should an individual never manage to earn this amount, his or her debt will be wiped out after 15 years.

Loans are available to Spanish or EU nationals as well as foreigners who can prove they have been resident in Spain for two years.

“This is a mechanism for showing solidarity between generations,” said Félix García Lausín, secretary general of the University Coordination Council. “Economic conditions should not prevent access to education.”

Spain’s central government has no plans at present to extend the loans to first-degree students. Undergraduates are already catered for with other kinds of grants which usually cover tuition fees, said Joaquín Ortgea, press officer at the Spanish Ministry of Education.

The government has been striving to make the means-tested grants available to more people in recent years. In 2004, 34% of families were eligible but this has risen to 55%, Ortega said.

Some of Spain’s regional governments are considering introducing their own student loans schemes along similar lines. Last June, the head of the Catalan higher education authority, Josep Huguet, announced plans to offer undergraduate loans.

Huguet will seek the support of local savings banks to help finance the scheme. The initiative will have a pilot run at the Terrassa School of Higher Commerce, although the exact timetable is not yet known.