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Are student grants for EU students a wasted investment?

 
Student grants and tuition-free university secure the future of the Danish labour market. But with many EU students travelling to Denmark for free grants and university education only to return home, should Danish taxpayers really be paying to educate Europe's youth?

SU and free university education are among the most cherished aspects of the Danish welfare system. But it’s not just Danes that benefit. Around 20,000 EU residents received Danish SU in 2016, including Andrzej Rogala and Kasia Stefanczyk, who moved to Copenhagen in 2014 to start Masters programmes at Copenhagen Business School.

Originally from Warsaw, Stefanczyk now studies architectural engineering, while Rogala has specialised in design and innovation.

“I had personally never considered studying abroad, but I wanted to change something in my life. I knew little about Denmark before moving here, but I heard about the generous student grants that would allow me to move away from Poland,” Rogala said.

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“When you come from a developing country such as Poland, you hardly ever get the opportunity to study abroad, as it is very expensive and our families are not able to support us. Being Eastern European, I could have never afforded to move here if it weren’t for SU.”

Rogala points out that he earns more from Danish student grants than he used to earn as a qualified, full-time worker in Poland after completing his undergraduate studies. His salary amounted to 2,500 Zloty per month, equivalent to just under 4,500 Danish kroner.

“I love it here now, it is such an amazing place for both design and architecture. But if it weren’t for SU, my parents would have had to give me all of their monthly earnings just to cover my rent,” he continued.

Workers get SU too
The rising cost of paying SU to EU students who move to Denmark primarily to study is a political hot potato. According to the latest figures from the Ministry of Education and Research, EU residents claimed 901 million kroner in SU in 2016, compared to 399 million kroner in 2012.

The increase is almost entirely due to a 2013 ruling by the EU Court of Justice. Until then, EU residents in Denmark could qualify for SU in a number of ways, but they would have to demonstrate a long-term attachment to Denmark. For example, having a Danish spouse, or living in Denmark for at least five years.

SU was not available to EU residents who had no previous attachment to Denmark, and primarily moved to Denmark to study, however. Technically, EU rules on free movement mean that EU workers in a foreign country cannot be treated differently than national workers. But the interpretation by Danish authorities did not regard EU students as workers – even if they had a part time job – and they were therefore not entitled to Danish social benefits such as SU.

READ MORE: Students – The burden of the future

The EU court ruled against this interpretation of the free movement rules, however, arguing that EU residents who move to Denmark with the primary goal of studying must be considered EU workers, as long as they work at least 10 to 12 hours per week. This is how Rogala and Stefanczyk qualify for SU – they both work as student assistants in addition to their studies.

The number of EU students claiming SU as EU workers – like Rogala and Stefanczyk – has exploded 2000 percent since the ruling, to 9,664 EU students last year. The increased cost on the taxpayer is around 400 million kroner per year.

Welfare tourism?
Jakob Engel-Schmidt, education spokesperson for the ruling Liberal Party (Venstre) sees SU grants for European students as a great investment for the country, especially in terms of attracting foreign talent.

“Through free education and grants to all EU members, we are presenting Denmark as an open and equal country. We have a lot of talented people coming to Denmark, and we would not want it any other way,” he said.

Still, the government is concerned that its enormous investment in EU students could be going to waste. 42 percent of EU students who received SU, and moved to Denmark less than a year before the start of their studies, had left Denmark within two years of graduation, the Ministry of Education and Research reported in November, while 38 percent remained.

“Danish society will have paid a lot of money over several years to provide their education, so we cannot afford a situation where we get nothing in return. Let me be clear, we are spending almost half a billion kroner a year on SU for European students, and it just can’t go higher than that,” said Engel-Schmidt.

Education Minister Ulla Tørnæs has repeatedly expressed her concern on the matter, and in a recent interview to TV2, she labelled the situation as “expensive for the Danish treasury and unfair to all Danish taxpayers”.

READ MORE: The academic sausage factory, grinding out dull students

In response to these fears of so-called “welfare tourism”, the government is considering a number of measures, including a reduction of University programmes that are offered in English. Engel-Schmidt is specifically targeting students enrolled at business schools around Denmark, where the registered number of graduates leaving the country is higher than average.

“When it comes to degrees from business academies, we see a lot of people coming from Eastern Europe, and about 65 percent of those who enjoy SU and free education leave straight after,” Engel-Schmidt explained.

“We agreed to cut back on the number of study opportunities on business-related degrees offered in English, as it is a bad investment for Denmark and its taxpayers.”

“The problem has been magnified”
The government might be blowing the issue out of proportion, however.

Of the 20 billion kroner spent on SU in 2016, only around 4.5 percent (901 million kroner) was spent on  around 20,000 EU, Swiss, Norwegian and Icelandic citizens. Just under half, 9,664, claim their SU as EU workers, which means that they must work and pay tax while accepting SU. And after graduating, almost 40 percent find a job in Denmark.

Nadja Shou Lauridsen, a lawyer and member of the think tank Think Europe, believes the government has repeatedly exaggerated the issue.

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“I believe on one hand that the problem has been overstated, and on the other that Danes have a hard time understanding why EU citizens are entitled to welfare benefits. Most of them probably do not know that most EU students, unlike them, must work at least 10 hours per week to receive SU throughout their whole studies,” she explains.

Lauridsen believes it is important to underline that EU students on benefits are also an active and important part of the Danish workforce. They pay their fair share of taxes and contribute to the economy from the very moment they start receiving SU.

She also argues that the Danish government should focus its energy on attracting European talent, rather on short-term goals such as cutting English-language programmes.

Benefits of Free movement
Neither Stefanczyk nor Rogala have completed their Masters yet, but they expressed a desire to work in Denmark after graduating this summer. But they will also be open to opportunities elsewhere, and will be applying for jobs abroad – most of their friends who left Denmark did so only after actively seeking employment in the country for years after graduating.

“In the bigger picture, the question is where the vacancies are, and getting a job is the most important thing for me at the moment. I will try here and see what happens, but I do know many people who have actively searched for a job in Denmark for years without success and left only for this reason,” Rogala explained.

Bijan Farsijani is among the 40 percent of EU students who received SU and decided to stay in Denmark. Born in southern Germany, he moved to Copenhagen after completing his undergraduate studies in Berlin. He recently graduated from a Masters programme in innovation and entrepreneurship at CBS, and now runs his own startup company.

If it weren’t for SU, he would have had to work longer hours to support himself. Instead, he had time to invest in building the foundations of his business.

“During my Masters, I was working only 10 to 12 hours a week, and thanks to the money I got through SU, I did not have to work longer hours. If that was the case, I don’t know if I’d be already running a company just a few months after graduating,” he explained.

“We use machine learning and artificial intelligence to analyse big data, and there don’t seem to be many companies in Denmark who do the same. So I believe we are somehow contributing to society here by bringing new knowledge to the country. This is already a way to pay back our SU.”

He also underlined that while the EU’s right to free movement did mean that students like him could claim Danish taxpayer funded grants, it also enables Danish businesses to hire talented and skilled workers from across the continent.

“One of the guys who works for us is from Poland, and another one, who will start soon, is from Hungary. They both moved here to study and are very rare talents in this field,” Farsijani said.

“It is this very conglomeration of knowledge that is incredibly unique – it’s very difficult to measure that value in kroner.” M

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By Gabriele Dellisanti

Editorial intern. Media and communications student at Lund University.

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