Students: The burden of the future

Student grants could be cut and partially replaced by loans under a government proposal. While they insist that Denmark would still have the most generous student grant system in the world, critics warn of the effects on social mobility, while students fear the consequence of having to study faster and work more on the side

Since the 1970s every Dane has been ensured the right to free education and financial support through the SU grants scheme. It’s a policy that has been admired abroad, built on guaranteeing  that education was never out of anyone’s reach.

But the grants, averaging around 5000 kroner per month, are now in jeopardy as the Liberal Party (Venstre) government argues they are too generous and threaten public finances. In their 2025 Plan, they propose a reform that will lower the free grant and increase student loans.

The government might have opened up the political debate, but ultimately it’s the students who will feel the change. Charlotte Hummeluhr, a Master’s student at the University of Copenhagen (KU), says the proposed reforms would have a huge impact on her life.

“I would choose to work more and cut classes to avoid debt,” she says. Similarly, fellow KU Master’s student Mia Ravn Jørgensen says it would force her to prioritise her time away from her studies.

“Losing SU will make me a worse student.”

The education level in Denmark has been rising over the past decades. Fewer and fewer Danes enter the labour market with only a primary school education, while the number of Danes with a Master’s degree has risen from around 225,000 to 314,000 over the past decade.

As a result, increasing numbers of Danes are claiming SU, from 190,000 in 1991 to 460,000 in 2014. Between 2009 and 2014 the number increased by 27 percent.

State spending on SU has, consequently, risen dramatically in recent years, from 10 billion kroner a year in 2006 to 20 billion kroner in 2016. Spending on SU now dwarfs the 15.2 billion kroner spent on higher education, and almost equals the cost of the Danish research budget – 21 billion kroner.

READ MORE: The academic sausage factory grinding out dull students

The Reform
Currently, a student who doesn’t live with their parents receives a 5,100 kroner grant and is entitled to an additional 3,000 kroner loan per month. The government has proposed lowering the grant to 4,300 kroner and increasing the student loan to match it at 4,300 kroner. Furthermore, the loans will no longer accrue the current four-percent interest rate while the student is studying.

Students claiming SU are also allowed to earn money on the side, but this is limited to around 12,000 kroner before tax per month. The proposed changes would increase this to 13,000 kroner. Newly-educated students would also be eligible for an additional 17,000 kroner tax free allowance in the three years after they graduate, to encourage students to choose degrees that they are more likely to find work with.

The opposition
During last year’s election campaign, the government denied having any intentions of cutting SU. Responding to criticism that the reform constitutes a broken promise, PM Lars Løkke Rasmussen said voters will be consulted as another election will be held before the reform takes effect in 2019.

The reforms will save around 3.3 billion kroner that the government plans on using to finance its 2025 plan, which is currently being negotiated in parliament.

While the right wing ‘blue’ bloc generally supports reforming SU, the left wing is overwhelmingly opposed, a view shared by the general public. A Megafon poll from earlier this year found that 69 percent of Danes neither want to lower SU, nor reform the system.

Far-left party the Red-Green Alliance (Enhedslisten) is particularly averse to the proposals, arguing that they challenge the fundamental principle of equal access to education.

“I don’t have words for how short-sighted this is,” Enhedslisten’s political spokesperson Pernille Skipper said. “With a click of his fingers Lars Løkke is turning Denmark into a country where education is only for those with well off parents. A lower level of SU will result in a less educated generation, and it will be the children of cashiers and bin men who will be chucked off the education train.”

READ MORE: Free money, forever

Dodgy numbers
Other left wing parties have also challenged the government’s rationalisation for making the cuts. The government argues that the increase in SU expenditure is linked to Denmark having a more generous grant scheme than its neighbours, causing an influx of too many foreign students.

“I don’t think it’s reasonable that the Danish SU is so generous compared to our neighbouring countries. We risk attracting foreign students who only come here for the free education and SU, without utilising the education in Denmark,” education minister Ulla Tørnæs said in a press release. She later told TV2 News that Denmark has the most generous student grant system in the world.

“That will still be the case after the reform.”

The number of foreign students claiming SU has increased in recent years. In 2013, the EU Court of Justice ruled that all  EU students who work a minimum of 10 hours a week can claim the monthly grant.

Those who qualify under that ruling currently make up 1.4 percent of the total SU budget, which amounted to 321 million kroner last year.

Another explanation for the increase in SU recipients is that this year almost 15,000 people have been moved from unemployment benefits to SU. This was a result of the government’s unemployment benefits reform, which took effect earlier this year. The reform forced unemployed under-30 year olds to study if they were to receive any form of government support.

Budget estimates for the next couple of years, however, suggest that SU costs have already peaked, which could be seen as making SU reform unnecessary. According to the 2016 budget, SU is estimated to cost 20,648 billion kroner in 2017, before dropping to 20,216 billion in 2018.

Mia Ravn Jørgensen, a Masters student at the University of Copenhagen, is concerned that her education is becoming less valuable than when she set out. Photo: Rasmus Degnbol

Mia Ravn Jørgensen, a Masters student at the University of Copenhagen, is concerned that her education is becoming less valuable than when she set out. Photo: Rasmus Degnbol

Is SU working anyways?
One of the main functions of SU is to increase social mobility and enable children to achieve a higher level of education than their parents. But according to a 2016 report by the Danish National Centre for Social Research (SFI) there remains a strong correlation between the level of education of parents and their children.

“Social background still plays a considerable role in relation to who gets what level of education,” explains SFI senior researcher Jens-Peter Thomson. “When looking at upper secondary grades, children with highly-educated parents – who have higher expectations for their children – do better than the children of parents who don’t have advanced degrees.”

Thomson explains, however, that further education has never been more accessible to children from families with low incomes and levels of education. These children are increasingly choosing to pursue further education he says, arguing that welfare programmes such as SU have played a role.

“We want to live in a society where your accomplishments affect where you end up. It should not depend on what you inherit. It should be your own effort that matters. That is why it is important that people have the opportunity to get educated. And it’s one of the reasons we offer free education and SU.”

Think tank Kraka is sceptical that SU has played such a large role in improving social mobility, however.

“Increased social mobility has been a prevailing argument for maintaining the current SU system, but it’s simply false,” explains Kraka chief economist Jens Hauch. “The purpose of SU was to secure equal access to education, but despite our generous SU, we have very low rates of mobility.”

Kraka has suggested an alternative SU reform that provides SU to Bachelor students, but not Master’s students. They estimate that this would save the government five billion kroner annually, which could be earmarked to increase social mobility and quality of education.

“We want to address the issue head-on. We don’t know if it will work, but we do know that the current framework is not good enough.”

READ MORE: Cutting to the bone

Livelihood at stake
Yasmin Davali, chair of the Danish student union Danske Studerendes Fællesråd, is actively fighting against the proposed SU cuts, and she argues that the government misunderstands what SU was designed for.

“SU is a student’s livelihood and their expenses don’t decrease just because you cut SU. It is impossible to survive if it is cut by 20 percent. Only 10 percent of students currently survive solely on SU.”

Her argument is upheld by a recent report co-authored by Djøf, AE-rådet and Epinion, which showed that university students spend almost all their SU on rent. Other living costs are financed by student jobs, while one in three students has taken on debt.

Davali adds that the 2013 Progress Reform has forced students to speed up the time it takes to finish their education, making the SU reform an added burden.

“The Progress Reform combined with SU reform will cause students to experience not only a time pressure, but a heavy economic pressure as well,” she says, arguing the combination of reforms will only increase unequal access to education.

“Many students will go far to avoid debt. Worst case scenario it might cause people to forgo getting an education, or possibly force them to drop out of their studies.”

Apples and oranges
The Danish government has taken some inspiration for the reform from Norway, which in 2002  changed its SU system from grants to loans. Instead students who graduate on time get  40 percent of the loan rescinded as an incentive.

Both countries offer free education, but according to the OECD only 59 percent of Norwegian students graduated in 2013, compared to 81 percent of Danish students. And while 22 percent of Danes between the age of 30 and 34 have more than a bachelor’s degree, in Norway that number stands at just 17 percent.

Birgit Bangskjær, chief consultant from Akademikerne, argues that the large difference in graduation rates can be explained by the respective grant systems.

“You could argue that it is SU that allows Danish students to finish their education and enables society to get more out of its investments in education,” she told Information newspaper.

“Dropping out is much higher among students who study part time. This makes sense as it are students from low education backgrounds who tend to study part time in Norway so they can work on the side and avoid debt. But it’s hard to be a student and work on the side, which is why many abandon their education.”

Recent OECD figures, however, shows that Norway is closing the gap on graduation rates and in 2014, 76 percent of bachelor-level students graduated. Speaking to Berlingske, Bangskjær stresses that the effect of a loan-based system on dropout rates is likely to be more pronounced in a five-year education, than a three-year Bachelor education.

Quality of Education
Unsurprisingly, students are apprehensive about losing a part of their grant in favour of the possibility for a larger loan.

“Ultimately, if SU cuts became a reality I would attend fewer classes in order to work more and avoid debt,” Master’s student Charlotte Hummeluhr said.

She is currently taking an unpaid internship as part of her studies, which is only possible because she receives SU – without it she would have to work instead.

“I’d lose out on a unique learning opportunity as well as practical experience. The company would also lose out on free qualified labour.”

The SU cuts would only be the latest in a string of reforms that have increased the pressure on students and reduced the quality of education. Last year, the Venstre government promised to cut 8.7 billion from university funding, while the former centre-left government passed the Progress Reform.

“Today, university is about meeting the learning requirements, passing the exam and then moving on to the next,” says Mia Ravn Jørgensen, who is concerned that her education is becoming less valuable than when she set out.

“The workforce expects us to be experts within our fields, but the truth is that we no longer have that opportunity to do so, because of the Progress Reform and the enormous cuts universities have been subject to in recent years. It doesn’t add up that students both have to study faster and work more next to their studies. It’s already a tough balance to find.” M

Read more:

Cutting to the bone

The academic sausage factory grinding out dull students

Free money, forever

Features, News

By Sophie Stenner Frahm

Facebook comments