Credit line for higher education students with mutual guarantee

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Name of the instrument - Local language
Linha de crédito para estudantes do ensino superior com garantia mútua
Name of the instrument - English translation
Credit line for higher education students with mutual guarantee
Scheme ID
181
Country
Portugal
Reporting year
2020
Type of instrument
Loan
Sub-type of instrument
Loan for HE expanded to adults
Type of entry
Single instrument
Short description

Higher Education students attending technical higher education courses, degrees, masters, or Ph.D. in Portugal can apply for the loan. The amount of the loan varies between EUR 1 000 and EUR 5 000 per year up to a maximum of EUR 30 000 (for a 6-year university programme). The loan is financed by the ESF, the Foundation for Science and Technology (FCT), and the banks that accepted to provide this service, but the scheme is managed by the SPGM (Sociedade de Investimento, S.A), a private organisation managing this credit line on behalf of the Portuguese Government. Banks are responsible for providing the loan, monitoring the accomplishment of the rules, and transferring the loan to students. The beneficiary does not have to pay for the credit during the period of its use and two years after that (grace period). The credit is paid back during a period of 6 to 10 years, to be negotiated between students and the bank. The current interest rate equates to the Euribor swap rate plus a maximum spread of 1.25% but can be reduced in the case of students benefitting from school scholarships or with good results at the University. The State acts as a guarantor, which eases the process of approval of the credit.

Level of operation
National
Name of a part of the country
Not applicable
Name of the region (for regional instruments)
Not applicable
Name of the sector (for sectoral instruments)
Not applicable
Relevance
Further instrument
Decree-Law n. 309-A/2007, from 7 September (Mutual guarantee schemes)
Objective(s) and target(s)
- Promoting the access to higher education - Improving the levels of attendance and completion of higher education courses - Increasing the levels of participation and qualifications
Year of implementation
2007
Operation/management
The credit is financed by the POCH - Programa Operacional Capital Humano (Capital Human - FSE), FCT - Fundaēćo para a Ciźncia e a Tecnologia, I.P (Foundation for Science and Technology, Public Institute) and the banks that accepted to provide this service. The financing provided by POCH and FCT to this credit line is managed by the SPGM - Sociedade de Investimento, S.A. (Investment Society), private organisation providing the guidance, support and financing to the banks. Students can request the loan to the bank in accordance with the law, responsible for accepting or not the request. Then, students should inform SPGM about the result. After one year of credit, the student needs to inform the bank on the educational achievement during that school-year, condition to continue benefiting from the credit line.
Eligible group(s)
It aims at financing academic costs of High Education students, attending or that will attend technical high education courses, degrees, masters or PhD in Portugal.
Group(s) with preferential treatment
The 'annual percentage rate of charge' of 1.25% can be reduced if the student has good results (an average grade above 14 (by the end of a given year). The reward spread can be deducted in 0.25% for the students benefiting from school scholarships.
Education and training eligible
Higher education programmes: bachelor, post-graduation, master and doctoral degrees.
Source of financing and collection mechanism
The SPGM - Sociedade de Investimento, S.A. (Investment Society) is the entity responsible for managing this credit line on behalf of the Portuguese Government and thus for defining the general rules of the loan. The loans need to be requested to the banks, who will decide about their approval, notifying the SPGM about it. The banks are also responsible for providing the loan, monitoring the accomplishment of the rules by students and transferring the loan to them.
Financing formula and allocation mechanisms
The amount of the loan is of between EUR 1 000 and EUR 5 000 per year up to a maximum of EUR 30 000 (for 6-year university programme). The beneficiary does not have to pay for the credit during the period of its use and two years after that (grace period). The credit is paid back during a period of 6 to 10 years, to be negotiated between students and the bank. During the grace period, there will only be interest payments.The current interest rate equates to Euribor swap rate plus a maximum spread of 1.25%. The 'annual percentage rate of charge' is lower than the regular credits and can be reduced in the case of students benefitting from school scholarships or with good results at the University. The State acts as a guarantor, which eases the process of approval of the credit.The credit is provided in fixed monthly instalments to students. To receive further payments after the 1st year, students need to conclude with success that school year and send the evidence to the bank.
Eligible costs
Academic expenses, not specified
Volumes of funding
2018 - The instrument was not available 2019 - EUR 13 000 0002020 - EUR 5 500 000
Beneficiaries/take up
2018 - The instrument was not available 2019 - 1 100 students 2020 - 600 students
Organisation responsible for monitoring/evaluation
Portuguese Society of Mutual Guarantee
Most relevant webpage - in English
Not available
Most relevant webpage - local language
https://www.spgm.pt/pt/catalogo/detalhes_produto.php?id=292
Recent changes

No recent amendment

Recent changes in response to COVID-19

No changes

Sources
SPGM - Sociedade de Investimento, S.A. (Investment Society)
DECO Protect
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