With the Erasmus scheme running out of money and fears that 2013 is going tougher financially, the European Commission has proposed an ‘EU Erasmus Loan Guarantee Facility’ for master’s students studying abroad. But the plan has come under attack from the very people it is said to support, as NIC MITCHELL reports.
A PROPOSED loan scheme to support master’s students studying abroad, part of ‘ Erasmus for all’, is under fire from the European Students’ Union (ESU), which claims it will do “more harm than good” to young people.
Karina Ufert, chair of the ESU, will outline the Union’s objections at a round table discussion on Wednesday (14 November, 2012) when she will urge EU member states to scrap the idea.
She says: “We are against the loan scheme, mainly because of the way it is conceived. It acts as a guarantee to the banks to ensure they will not lose their profits and is no guarantee for students. They will have to repay their debt after getting a degree whatever their circumstances and whether they will get a well-¬paid job or not.”
Put promises into action.
In a paper to be presented at Wednesday’s meeting, the ESU argues that, ‘Since the Bergen Ministerial Communiqué (2005), European governments have been repeating their commitment to full portability of grants and loans. Therefore the first and foremost concern should be putting this promise into action.
‘In a number of EU countries like Denmark and Finland, students can get support to study abroad on favourable conditions and we believe that instead of setting up a new scheme on the European level, which fails to ensure a full income-contingency model, governments should revitalise their efforts towards implementing Bologna goals of encouraging student mobility’.
“Besides, this is not the time to be pushing people into debt,” says Karina.
The ESU-chair also says out that the maximum amount set for the loans per individual (€10.000 per year) does not reflect the real needs of students to pay tuition fees and living costs in most of the attractive study destinations.
Loans for the privileged
“We are also concerned that the loans would remain accessible only for students from more privileged backgrounds, who can get support from their families or otherwise finance their stay abroad, rather than widen access for participation for underrepresented groups and promote social mobility”, says Karina.
“And we fear the impact the loan facility would have on students from the less wealthy member states and their choices to get any job possible after they graduate rather than taking the proper time to find something that truly matches their qualification and personal aspirations.
“If you are a Romanian with a €10.000 loan, you can be pretty sure that you will keep on repaying it from a Romanian salary till your retirement. So those young people will move to other EU-countries and it will cause a brain drain. Since the financial intermediaries will be providing mortgage-based loans without an unemployment or low-income guarantee, individuals will be incentivised to move to certain countries, mostly in Western Europe or outside EU.
“We believe that the current proposal to facilitate the loans through predominantly private financial intermediaries lacks any risk-analysis about the impact it will have on young people’s debt. The consequences of this kind of funding can be best seen in the case of the United States.
“Americans now owe more on student debt than on credit cards.”
* This interview with Karina Ufert of the ESU first appeared on the De la Cour Communications website on November 12, 2012: http://delacourcommunications.com/european-mobile-loans-will-help-banks-not-students/Outward-boundstudentswinBritishchampion