New loans scheme to make masters students mobile

Under the Erasmus+ Master Loan Guarantee Scheme launched this week, up to 200,000 postgraduate students are in line for loans of up to €12,000 (US$13,700) to help them study for a one-year masters degree in another European country or €18,000 for a two-year masters.

The scheme will receive around €500 million from the budget of the huge Erasmus+ student mobility programme, which the European Commission says will help to raise up to €3 billion in loans.

Erasmus+ Master Loans will be pioneered with €30 million worth of loans being offered by Spain’s MicroBank, the social bank of La Caixa.

These will be for both Spanish students pursuing postgraduate studies abroad and students from other Erasmus countries going to Spanish universities for masters courses.

The ambitious scheme is meant to fill the gap in financial support for postgraduate students wishing to study abroad in one of the 33 Erasmus programme countries, and will be rolled out later in other European countries to help increase student mobility up to 2020.

The European Commission says the financial risk of the loans will be shared between the European Union and participating financial institutions, thanks to support from the European Investment Fund.

No collateral will be required from students or parents, to ensure equality of access.

Not all jumping for joy

But not everyone is jumping for joy.

The European Students’ Union or ESU, which represents student interests in 39 countries, has been critical of the masters loans idea since it was first mooted three years ago.

It fears the loans will plunge students into more debt, despite European Commission assurances that the funding will be offered at favourable interest rates and have delayed payback options to allow graduates up to two years to find a decent job before repayments begin.

The ESU says Erasmus+ Master Loans lack a full income-contingency element to help lower-paid and unemployed graduates, and argues that member states should provide grants to help less advantaged students study abroad.

Elisabeth Gehrke, chair of the ESU, told University World News that the commission should work to support and encourage countries to create their own portable loan and grant systems.

“This is something countries committed to do already in Berlin in 2003 through the Bologna Process. We cannot continue to indirectly subsidise this from a European level every time countries will not commit to internationalisation.

“It is not sustainable, and the European Union should not be encouraging increased student debt and encouraging private banks to prey on students, especially in a time of major economic crisis.”

But Nathalie Vandystadt, European Commission spokesperson for education, culture, youth and sport, told University World News: “The Erasmus+ Master Loans will provide more funding for students who wish to study abroad but may not be able to do so without support.

“Students can benefit from favourable conditions, making the scheme available to students from all backgrounds. With few national loans systems supporting studies abroad, the scheme will also help to overcome obstacles to student mobility,” Vandystadt explained.

“The new tool is an extra source of student funding, complementing the range of study grants available under the Erasmus+ programme.”

New student association hardens views

The European Students’ Union opposition hardened after the European Commission timed the launch of the master loans with an announcement of a new Erasmus+ Student and Alumni Association, or ESAA, to represent more than three million Erasmus+ students in the period up to 2020.

The new association brings together four existing bodies and their local networks: Erasmus Mundus Students and Alumni Association, Erasmus Student Network, garagErasmus or gE, and OCEANS Network.

The ESU said the new umbrella organisation was the result of a “forced and arranged marriage” and challenged whether it would really be independent of the commission and private enterprise interests.

“The existence of ESAA is, of course, not a problem in itself. The problem comes when the European Commission claims the ESAA speaks on behalf of students,” said the ESU in a strongly worded statement.

It also criticised Xavier Prats Monné, director general of the European Union’s Directorate General for Education and Culture – or DG EAC – for what students claim was a suggestion at the Erasmus+ launch that students had only played a marginal role in reforming education. “This could not be further from the truth,” said the ESU.

Elisabeth Gehrke commented: “The tactic of creating parallel or superseding structures controlled by policy-makers is as old as students organising.”

The ESU had been critical of the Erasmus+ Master Loans from the start, she added. The fact that the scheme’s launch was combined with an attack on independent student representation seemed like somebody in the DG EAC’s idea of a joke.

“We are not laughing. The dangers of student debt, and the right to organise, are serious matters.”

Gehrke described the situation as “very worrying” and added that the new student body would be invited to a meeting “to see how we can help protect their right to organise. We will also be reporting the DG EAC and this process to the European Ombudsman."

No competition

Commission spokesperson Nathalie Vandystadt told University World News, however, that the ESAA was a new organisation to support the students and alumni of Erasmus+ study programmes.

“It won’t in any way represent or compete with student representative bodies, but aims to improve the study abroad experience by bringing together the expertise of four existing support organisations.

“ESAA is fully autonomous in its decision making. As an important stakeholder in the field of education, the commission will support its logistic and organisational set-up.”

Nic Mitchell is a British-based freelance journalist who runs De la Cour Communications. He regularly blogs about higher education for the European Universities Public Relations and Information Officers’ association, EUPRIO, and on his website.