Loan
Definition and description
Loan scheme allows individuals to borrow financial resources (on favourable conditions) from their future income to cover part of their (education and training) expenditure. The State may support the availability of loans and co-finance loan-related costs to encourage participation in adult learning.
To cover tuition fees or living costs during (full time) study, adults might be required to take up a loan. Without support structures, taking up a loan for education and training involves high levels of personal risk, as it is not sure that a started programme will be completed successfully or that a programme will allow an individual to sustain or achieve a well-paid occupation. On the free market, access to loans might be restricted due to missing securities or continuing income. Furthermore, high interest rates and risk premiums might work as a disincentive.
In order to overcome restrictions in access to loans for education and training, various Member States have opened up standard loans – partly in combination with and adding up to grants - also to educational and training purposes. Most frequently, these schemes are aimed at first-time students in higher education, but are also open for adults (25 and older) up to a certain age limit or without such a limit. Moreover, there are examples of loan schemes designed explicitly for adults for (specific) educational and training purposes (e.g. training loan for unemployed people, job seekers and employees aged 45+ in Poland).
About two thirds of EU countries and the UK have loan schemes for education and training purposes in which the government plays some role. Governments are usually involved in setting eligibility, repayment and other rules as well as in monitoring and evaluating implementation of the loan schemes. In several schemes, the government acts as loan provider (through financial institutions). An important government function also includes the provision of subsidies.
The State-supported loans provide solutions beyond credit provision on the private capital market at three fundamental levels:
- Reducing the risk of the (adult) learner: the individual’s risk of taking on a loan may be strongly limited by providing income-contingent loans, where repayment depends on successfully achieving a wage above a pre-defined level.
- Overcoming the difficulties in access to loans: reluctance of banks to provide credits to adult learners might be reduced if banks are not required to bear the risk of credit default. The State (via special bodies) may take on this risk and offer guarantee in case of default.
- Reducing interest rates and improving conditions for repayment: the costs of loans could be reduced by State subsidies (lowering interest rates for the borrowers) or by regulating a particular submarket for loans for educational and training purposes. Finally, the State may support the access to/attractiveness of loans, if repayment of the loan starts only (some time) after completion of the educational and training programme/ grace periods are offered.
Key features and statistics
ID | Country | Name of the instrument - Local language | Name of the instrument - English translation | Sub-type of instrument | Level of operation | State sets general interest rate | State finances general subsidy (e.g. subsidising interest rate, granting alleviation/grace periods) | State provides loan guarantees | Start of repayment | Income-contingent loan repayments | Preferential treatment options established | Education and training eligible |
---|---|---|---|---|---|---|---|---|---|---|---|---|
69 | EE | Õppelaen | Study loan | Loan for HE expanded to adults | National | Yes | No | Yes | In a fixed period after graduation (e.g. in 2 years after graduation) | No | Yes | General |
74 | EL | Άτοκα φοιτητικά δάνεια | Interest-free student loans | Loan for HE expanded to adults | National | Yes | No | Yes | Other | Yes | No | Higher education studies only |
78 | ES | Programa de préstecs per a estudiants universitaris | Programme of loans for university students | Loan for HE expanded to adults | Regional (Catalonia) | No | No | Yes | Other | No | No | Higher education studies only |
84 | FI | Opintotuki | Study grant and loan guarantee | Loan for HE expanded to adults | National | No | No | Yes | Immediately after graduation | No | No | General |
90 | FR | Prêt étudiant garanti par l'État | Student loan guaranteed by the State | Loan for HE expanded to adults | National | No | No | Yes | Other | No | No | Higher education studies only |
105 | HU | Diákhitel | Student loan | Loan for HE expanded to adults | National | No | No | Yes | In a fixed period after graduation (e.g. in 2 years after graduation) | Yes | Yes | Higher education studies only |
135 | LT | Valstybės remiama paskola studentams | State supported loans for students of higher education | Loan for HE expanded to adults | National | No | Yes | Yes | Other | No | No | Higher education studies only |
153 | LV | Valsts galvotie studiju un studējošā kredīti | State-guaranteed loans for students | Loan for HE expanded to adults | National | Yes | No | Yes | In a fixed period after graduation (e.g. in 2 years after graduation) | No | No | Higher education studies only |
160 | MT | Skema għaż-żgħażagħ fuq studju specjalizzat | Youth Specialisation Studies Scheme | Loan for HE expanded to adults | National | No | Yes | No | At the start of taking up the loan | No | Yes | Higher education studies only |
166 | NL | studievoorschot | Study loan | Loan for HE expanded to adults | National | Yes | Yes | No | In a fixed period after graduation (e.g. in 2 years after graduation) | Yes | Yes | Higher education studies only |
175 | PL | Pożyczka szkoleniowa z Funduszu Pracy | Training loan from the Labour Fund | Loan specific for (a subfield of) adult learning | National | Yes | Yes | No | Immediately after graduation | No | No | General |
190 | SE | Studiemedel (CSN) | Student aid - loan and grant scheme | Loan for HE expanded to adults | National | Yes | Yes | Yes | Other | No | No | General |
199 | SI | Kredit za študij | Study loans | Loan for HE expanded to adults | National | No | No | No | In a fixed period after graduation (e.g. in 2 years after graduation) | No | No | Higher education studies only |
204 | SK | tudentskż pō˛ickovż fond | Student Loan Fund | Loan for HE expanded to adults | National | No | No | No | Immediately after graduation | No | Yes | Higher education studies only |
215 | UK | Professional and career development loans (PCDL) | Professional and career development loans (PCDL) | Loan for HE expanded to adults | Regional (Scotland) | No | Yes | No | Immediately after graduation | No | Yes | General |
216 | UK | Advanced learning loans | Advanced learning loans | Loan for HE expanded to adults | Regional (England) | No | No | Yes | At the start of taking up the loan | Yes | No | General |
233 | DE | KfW Studienkredit | KfW Student´s loan | Loan for HE expanded to adults | National | No | No | Yes | Other | No | No | Higher education studies only |
256 | IT | Fondo per il credito ai giovani | Loan for studies | Loan for HE expanded to adults | National | Yes | No | Yes | In a fixed period after graduation (e.g. in 2 years after graduation) | No | No | Higher education studies only |
ID | Country | Name of the instrument - Local language | Name of the instrument - English translation | Year | Volume of loans granted (EUR) | Year | Number of beneficiaries (individuals) |
---|---|---|---|---|---|---|---|
69 | EE | Õppelaen | Study loan | 2019 | EUR 2 500 000 | 2019 | 1 742 |
74 | EL | Άτοκα φοιτητικά δάνεια | Interest-free student loans | Not available | Not available | Not available | Not available |
78 | ES | Programa de préstecs per a estudiants universitaris | Programme of loans for university students | 2017 | EUR 3 092 392 | 2018 | 1 974e |
84 | FI | Opintotuki | Study grant and loan guarantee | 2019 | Study grants: EUR 122 624 435 (loans are not public costs) | 2019 | 98 396 |
90 | FR | Prêt étudiant garanti par l'État | Student loan guaranteed by the State | 2015 | EUR 414 900 000 | Average of years | 6 490 |
105 | HU | Diákhitel | Student loan | 2019 | Student loan 1 for the age group >25 years: approx EUR 11 012 000. Student loan 2 for the age group >25 years: approx. EUR 11 906 000. | Not available | Not available |
135 | LT | Valstybės remiama paskola studentams | State supported loans for students of higher education | 2019 | EUR 10 704 091 | 2019 | 5 339 |
153 | LV | Valsts galvotie studiju un studējošā kredīti | State-guaranteed loans for students | 2018 | EUR 7 005 138 | 2018 | 1 513 |
160 | MT | Skema għaż-żgħażagħ fuq studju specjalizzat | Youth Specialisation Studies Scheme | Not available | Not available | Not available | Not available |
166 | NL | studievoorschot | Study loan | 2019 | EUR 2 903 445 | 2019 | 179 000e |
175 | PL | Pożyczka szkoleniowa z Funduszu Pracy | Training loan from the Labour Fund | Not available | Not available | 2019 | 4 |
190 | SE | Studiemedel (CSN) | Student aid - loan and grant scheme | 2019 | Approx. EUR 1 896 400 000 | 2020 | 390 432 |
199 | SI | Kredit za študij | Study loans | Not available | Not available | Not available | Not available |
204 | SK | tudentskż pō˛ickovż fond | Student Loan Fund | Not available | Not available | Not available | Not available |
215 | UK | Professional and career development loans (PCDL) | Professional and career development loans (PCDL) | Not available | Not available | Not available | Not available |
216 | UK | Advanced learning loans | Advanced learning loans | 2019 | Approx. EUR 138 178 000 | 2019 | 57 500 |
233 | DE | KfW Studienkredit | KfW Student´s loan | 2020 | EUR 1 300 000 000 | 2020 | 40 721 |
256 | IT | Fondo per il credito ai giovani | Loan for studies | Not available | Not available | Not available | Not available |