New Nordic agreement on compensation for students

The Nordic Council of Ministers for Education signed a new agreement on compensation for hosting one another’s students, at a meeting in Helsinki this week, with an increase in the per capita payment for countries that receive more students than they send.

The previous agreement was signed in 1996, and the new agreement will be effective from 1 January 2013 for Denmark, Finland, Norway and Sweden.

Danish Minister of Education Morten Østergaard told parliament in autumn that he had raised the issue of compensation with his Nordic colleagues because the number of students from other Nordic countries – notably Norway – had continued to grow over the past decade.

“It is an example of good neighbourhood when we in this way can make voluntary agreements that give an extra compensation to those of the Nordic countries that receive more students than they are sending out.

“It is a robust agreement that is securing a better share of the burden between the countries. It means much for the government that there still shall be a large exchange of students,” Østergaard said in the parliament.

The new agreement means that the yearly compensation per student for Denmark will be DKK22,000 (US$3,800) in 2013 – the same as it was in 2012 – rising to DKK30,000 (US$5,200) in 2014. The compensation will be regulated according to the consumption index calculated each year by Statistics Denmark.

Under European Union (EU) regulations, Denmark is obliged to treat citizens of the EU and the European Economic Area the same as Danish citizens, which means that European students are entitled to free higher education in Denmark.

The compensation agreement has been concluded despite this, with the cost to be carried by governments rather than by individual students.

“We have raised this question in the Nordic Council [the Nordic inter-parliamentary body that promotes educational, cultural and social collaboration], and we think that the Danes have a good point,” Norwegian Minister of Education Kristin Halvorsen told the Norwegian Broadcasting Company, NRK.

If as many Norwegians study in Denmark in two years' time as they do today, this will imply a 25% increase in the compensation Norway has to pay – or NOK80 million (US$14 million) – the Norwegian Ministry of Education announced.

Large mobility imbalances

There is a substantial imbalance in student mobility among Nordic countries.

There has been an increase of 3,872 (60%) in the number of Nordic students to Denmark since 2001-02, while fewer Danish students have gone to Nordic countries in this period.

Of 10,307 mobile students in 2010-11, 60.5% were studying in Denmark – including 2,938 Norwegians, who represented 47% of the Nordic students and 13% of all foreign students in Denmark, more than any other country. Only 189 Danish students studied in Norway.

There were 37 Norwegian students taking degree studies in Finland in 2010-11, 34 in Iceland and 1,078 in Sweden, against 763 Swedes studying in Norway.

Norwegians look upon studies in Denmark as exotic and many target limited-place courses in fields such as medicine and veterinary sciences, which are difficult to get into at home.

Nordic countries have numerous programmes with limited places, and part of the imbalance has been caused by Danish entry regulations favouring particular students – especially from Sweden – until this year.

In 2006, 34% of all medical students in Denmark came from another Nordic country, but this year they account for only 7% due to changes in entry requirements for Danish students.

“We welcome students from our neighbouring countries,” Denmark’s Østergaard said to Danish Radio, “but we will not finance Norwegian and Swedish medical education.”

Members of the right-wing Danish People’s Party have called for a compensation of the total costs for Nordic degree students in Denmark, estimated to be DKK275 million.

Iceland has sent 1,058 students to Denmark and 250 to the other Nordic countries, but is not included in the agreement, probably because of economic austerity measures in Iceland following the bankruptcy of Icelandic banks in 2008.

Karina Ufert, chair of the European Students' Union, told University World News: “It is obvious that expanding higher education systems, especially to international students, involves extra costs and we would like to welcome the initiative of the Nordic ministers to install a compensation mechanism and fund it from national budgets.

“It shows clear strategic thinking of the governments, who recognise the importance of investing in human capital within the region.

“We would expect the same discussions to happen at the EU level, and instead of proposing an EU masters loan scheme, we encourage speaking about responsible solutions which will increase the competitiveness of Europe as a whole.”

This does not fit well with the view of ANSA, the Association of Norwegian Students Abroad, which represents 20,000 mobile Norwegian students. Its President Henriette N Thommessen, told University World News:

"ANSA finds it regrettable that Denmark is focusing on Norwegian students as an economic burden, when they in reality contribute considerable economic resources to Denmark during their research stay there.”

The argument is that the capital investment by Norwegian students is higher than their costs. A 2010 survey estimated that each Norwegian student spent DKK160,000 a year, which meant total spending was some DKK480 million against the around DKK275 million spent by Danish universities and colleges on Norwegian students.

“We think that exchanges of students between the Nordic countries are positive and ought to be promoted. It contributes to an investment in a common cultural understanding, history and future closeness between the countries,” said Thommessen.

“The problem is not that Norway or Sweden are sending too many students to Denmark, but that Denmark is not good enough to provide for their own students to go abroad.”

The managing director of the Illuminate Consulting Group, Daniel J Guhr, said: “The need to design or update a transfer payment system is a reflection of competing and on some level contradicting policy paradigms.

“As such, this compensation agreement might be a politically expedient compromise, but it is structured in a way that does raise questions about its long-term effectiveness.

“The nature of public rather than market-driven transfer programmes often involves dynamics which tend to lead to further distortions and less effective investment behaviour,” he told University World News.

“One can question such systems from many viewpoints. What happens when the south-to-north degree student mobility dynamics within Europe become even more pronounced? Should a Nordic country levy a transfer fee on Spain or Greece?

“The current calculation of transfer payments seems to reflect political needs more than cost structures. How will such a model operate in 10 years in the light of ever-larger cost differences between, for example, medical and social science degree tracks?”

Kai Kouvimäki, a senior advisor at the Nordic Council, who prepared the agreement for the ministers, told University World News:

“My opinion is that it makes the cooperation easier when there is an imbalance between the countries. It would anyway be interesting to do some research on why there is an imbalance and could we do something about it?”