As economy sags, more students saddled with debt
Since 2003, the number of people with a student loan debt of over 250,000 kroner has skyrocketed from 1,217 to 5,889 in 2011, and that’s not even counting the students that have yet to finish their studies, according to the Finance Ministry.
The financial crisis has led to a dwindling number of student jobs and many are forced to take SU Loans – a supplement to the SU stipend – in order to make ends meet. This is especially problematic for students who accumulate considerable debt and don’t finish their studies, said Per Christian Andersen, the head of the committee that advises the Education Ministry about the SU programme.
“They are really in trouble and a number of them are forced to take out further loans to on top of that. We have repeatedly discussed how to help this group of young people,” Andersen told Politiken newspaper. “We don’t believe that financial planning should be the responsibility of education institutions, but now we will take the matter up with the minister.”
But the dilemma extends to all the students who accrue debt, even those do graduate, because SU debt can have serious and long-lasting consequences.
“It doesn’t matter what kind of debt you have to pay off. The more you owe, the less you’re able to borrow in the future to do things like but a place to live,” Ann Lehmann Erichsen, an economist with Nordea, told Politiken.
And the high unemployment numbers aren’t helping either. A report from Djøf, a union representing lawyers and economists, indicated that students are purposely prolonging their studies because of the current high unemployment figures. Four out of ten students are considering whether to extend their studies in an effort to avoid graduating and facing a stagnant job market.
See related story: Students take too long to finish university
“We see a trend towards some students considering whether to postpone completing their studies because of the high unemployment rates,” Andersen told Information newspaper.
But the education minister, Morten Østergaard (Radikale), wasn’t bothered by the rising number of students facing considerable SU debts.
“I think that it would only be worrying if students prematurely ended their studies having accrued a large debt, and that is not happening at an alarming rate,” Østergaard told Politiken.