Degree mobility + loans doesn’t work

Just a few weeks ago, the highest decision-making body of the European Students’ Union (ESU) – the board, composed of 47 national student unions from 39 countries – adopted a resolution calling for the scrapping of the idea of introducing a European Masters Degree Loan Guarantee Scheme.

Earlier, the ESU had voiced serious concerns about this new instrument, included in the new Erasmus for All proposal as part of the multiannual financial framework (MFF) from 2014-20. ESU’s detailed position on the scheme can be found here.

The ESU has a clear policy preferring grants as a means of student support over loans. This is linked to our firm belief that higher education is a social responsibility that should receive public financial support.

At the end of the day, the benefits of a highly educated population exceed the usual economic reasoning of training skilled labour because generally speaking a more educated society means a more equal society.

Mobility goal of 20%

But let us leave the ideological battle aside for a moment and get back to the proposal we now have on the table.

First of all, let’s speak about the numbers. There is an ongoing fight for every euro that is supposed to be spent on the new Erasmus for All programme.

We, of course, welcome the increased budget in the new MFF, but we would also like to clarify that we see it as a follow-up to what the European Union’s (EU) ministers of education had agreed on previously – setting a benchmark so that by 2020 at least 20% of students should have experienced a study period abroad.

Therefore, we find it absolutely reasonable that higher education gets comparatively more now than in previous years. This is also crucial if we want to commit to the social dimension goals of EU programmes, such as by tying the grants to the destination of study.

The loan guarantee was set to receive around 5% of the whole budget for Erasmus for All. But if we do a simple arithmetical exercise and try to see how much it would mean proportionally for the higher education part of the budget, the loan scheme would claim around 10% of the total amount.

The scheme might be optional for students to use, but in terms of added value the cost is simply too high.

Students hunted for repayments

And we move on. We have said several times that the EU has not properly investigated the potential impact of this new policy instrument. Yes, one can argue that we won’t be able to assess its impact without actually testing it out.

However, the ESU believes that is wrong. We feel that even without looking into levels of student indebtedness in the United States, Canada or Chile, it is possible to find alarming signals in Europe.

One clear example would be the United Kingdom, where a new debate has emerged around the size of debt students generate through paying tuition fees and persistent underestimates of their living costs. This is not to mention that international student loans require additional efforts to make sure that students pay back.

The Student Loans Company in the UK has hired private agents to track down students who dropped out and went off radar after returning to their countries.

The situation in the UK sends a clear signal, that such loans are risky and that students experience problems meeting their commitments. EU funds should not be used to support a financial hunt of students, either directly or indirectly.

Brain drain in Europe

Now to the issue of brain drain. It is no secret when we speak about regional development in Europe that some professions are better paid than others.

Erasmus for All is a scheme that is funded from public money, so we expect a thorough consideration of whether it will help us to build a stronger and more cohesive Europe – especially since there are alternatives available, such as using the EU’s structural funds to set up grant schemes to help young people achieve better education and better employment opportunities with the regional dimension in mind.

A lot more can be said, but the bottom line probably is that we do agree on the principle that degree mobility should be supported. At the same time, we cannot write off the Bologna commitments, such as the portability of student support, and we expect them to be back on the agenda for decision-makers with some clear and concrete outcomes.

We call for tools that will respond to the actual and current needs of students. It is a fact that the current system of loan repayments does little to help poor graduates.

As always, we are eager to discuss alternatives for making learning mobility a reality for more people, and to participate in the development or implementation of the measures or tools that are needed.

* Karina Ufert is chair of the European Students’ Union.