Denmark tops neighbours on funding of study support

A new report shows there is a well-developed funding system in the Nordic region compared to other regions in the world but with significant differences between the countries, with the highest level of support provided in Denmark and the least in Finland.

The working group for Student Aid in the Nordic Countries or ASIN, which has representatives from the government loan funding agencies of all Nordic countries, on 15 October published a comparison on funding support for studying and how this might affect student behaviour, notably on the need to work while studying.

The report, Students in Nordic Countries – Study support and economics, has produced a wealth of statistical data comparing how much funding 925,636 students in the Nordic countries who benefit from government support are receiving.

ASIN monitors statistical trends and in particular how the countries represented are funding students abroad and how this is changing over time.

The report reveals that:

  • • The maximum support in loans and grants without including students’ own work income is highest in Denmark and lowest in Finland. The support given as a grant is also highest in Denmark.

  • • Comparing students’ total financial resources, including students’ work income from 10 hours per week after taxes, they are highest for students in the Faroe Islands, followed by Denmark and Norway.

  • • Taking out maximum loans and grants combined with income from work, students in the Faroe Islands and Norway have the highest level of loans/income after taxes.

  • • Seen in relation to value-for-money (indexed against price levels), the level of disposable funding income is highest in Sweden.

  • • It is most expensive to take up study loans in Denmark due to Denmark claiming interest on the loan (at present 4%) while the students are receiving education, while this is not done in the other Nordic countries.

  • • Students receiving financial support are working significantly more hours per week in Sweden, Norway, Finland and Iceland compared to Denmark.

Recent reforms

Two countries have made significant reforms recently. In Norway, one week of funding was added to the total study time per year eligible for support in 2015-16 and an additional week was added each year in subsequent years, bringing the total support time to 11 months in 2019-20, compared to nine or 10 months in the other countries.

In Finland, as of 1 August 2017 the grant share of the total funding was reduced from 57% to 28%, increasing the loan share significantly.

Significant funding differences

Monthly financial support in DKK in 2019, including grants and the maximum student loan, is highest in Iceland (DKK10,300 or US$1,500), followed by Denmark (DKK9,321), Sweden (DKK8,405), Norway (DKK8,105), the Faroe Islands (DKK6,889) and Finland (DKK6,723).

The total number of students receiving government support was 291,481 in Denmark, 279,630 in Sweden, 168,534 in Norway, 180,077 in Finland, 4,746 in Iceland and 1,171 in the Faroe Islands.

The maximum student financial support excluding students’ own income was highest in Denmark (DKK102,083) and lowest in Åland* (DKK55,475). Indexed with Denmark equal to 100, the other countries score as follows: Iceland (92), Norway (85), the Faroe Islands (80), Sweden (75), Greenland (67) and Finland (59).

Denmark has a significantly higher proportion of the total funding given as a grant (DKK73,012), while the maximum level in the other countries was 81% of the grant level given to Danish students in the Faroe Islands, 54% in Norway and 36% in Sweden, with Finland having the lowest score with 25% of the Danish level.

The maximum number of months a student can receive government funding is highest for Norway (88 months), followed by Greenland, Denmark and the Faroe Islands (82 months), Iceland (72 months), Sweden (55 months) and Finland (54 months).

Students working

The report also tracks how many hours students are working while studying, finding that the median number of hours worked are highest in Iceland (28), followed by Sweden (27), Norway (20) and Denmark (13 hours). The percentage of students working more than 20 hours per week is highest in Iceland (61%), followed by Norway (57%), Sweden (47%) and Denmark (9%).

The study also asked the students in five of the countries how much of their total funding income was left once all living costs had been deducted. This was found to be lowest in Denmark (DKK1,298) and highest in Iceland (DKK3,844). It corresponded to 15% of total funds available in Denmark, 23% in Iceland, 26% in Norway, 32% in Sweden and 38.5% in Finland.

The report said previous comparisons have only to a limited extent included the context and the different perspectives from which the support levels can be compared.

International comparisons of student aid are made more difficult by the fact that in other European countries there are, for example, forms of support such as a ‘family allowance’ and tax deductions for the parents of students, which do not exist in the Nordic countries.

“Another significant difference between the Nordic countries and the other European countries is of a cultural nature,” the report says. “This is reflected in the fact that most students in higher education in the Nordic countries are not living with their families, while many students outside the Nordic countries are continuing to live at home during their studies.”

ASIN says the report contributes to a more complete picture of student finances in relation to the different student support systems of the Nordic countries.

Finland figures questioned

Esa Hämäläinen, director of administration at the University of Helsinki in Finland, told University World News that the statistics for Finland do not reflect the fact that, although in 2017 there was a change in the student aid and support system – and the support for living costs was moved from the student aid strand to general living support – the students do still get this support.

The loan in Finland is €650 (US$726) per month and the grant is €250 per month. In addition, students are entitled to aid for housing costs, which varies from town to town and is dependent on the rent. Typically, for a student living in a student house it could be around €150 to €200 per month.

“It seems that the comparison does not recognise this,” he said.

"In general, the low student aid and high proportion of loan has been a big issue in Finland. Overall, students would rather work part-time than take the loan. Now, with low interest rates we are witnessing a change taking place and the proportion of students taking a loan is increasing, but it does not change the bigger picture.”

However, he conceded that student aid has not been inflation-protected for decades – this means that the money received has over the years “decreased” in value as purchasing power has gone down.

Call for reform

Stina Vrang Elias, director of the Danish think-tank DEA, has repeatedly called for a re-orientation of the way Danish SU (the state educational grants and loans scheme) is demanding growing public funding.

“If the government wants to cut funding in higher education, it has a better option on its hands than heavy cuts to the budgets of universities. Today, we use as much money on student financing as we use in total investments in the higher education sector, DKK14.7 billion versus DKK14.8 billion. In the period 2006 to 2016 the SU grant costs increased from DKK8.7 billion to DKK15 billion.”

It remains to be seen if the new government led by the Social Democratic Party will look to reform the Danish SU system.

University World News addressed this question to Akademikerne – the Danish Confederation of Professional Associations – whose Chief Adviser Birgit Bangskjær said: “The new comparison study of the Nordic countries looks very interesting, but for the Danish debate on whether or not to reform the student support system, the effect on social mobility in education is crucial.”

“The former Liberale Venstre government failed twice to reform the student support system, because of the broad public as well as political concern that reform would have a negative impact on social mobility in education. The concern is real as evidence shows that Danish student support has had, and does have, a positive impact on social mobility in education.”

*Åland is a self-governed group of islands between Sweden and Finland that is included in Nordic higher education cooperation.