Danish students receive twice as much money in government-allocated student allowances (SU) as their peers in Sweden, Norway and Finland, reveals a new report by the Danish think-tank Cepos.

In 2014, the annual SU in Denmark amounted to 69,600 kroner (61,500 after tax), while students in Sweden received 23,600 kroner after tax, the Norwegians  33,500 kroner and the Finns 33,400 kroner.

However, both in Sweden and Norway, students can take up more loans from the government than it is currently possible in Denmark, claims Mads Lundby Hansen, the chief economist at Cepos.

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Replace SU by loans
Hansen believes the Danish SU should be reduced to match the level in other Nordic nations and that the availability of state-provided student loans should increase.

This intervention could save the state 4 billion kroner annually, according to Cepos.

“Alternatively, we could replace some of the SU with student loans, so that students would only get SU during the first three years of their studies [bachelor degree] and then they could take a loan for the remaining two years [master’s degree],” explained Hansen.

“One should remember that young people who go to university are often the ones who end up being the most well-paid in society. It makes no sense to pay high benefits to those who will eventually earn the highest salaries.”

Hansen does not think this solution would close the door to higher education to young people from low-income families, if they get the opportunity to compensate for the lack of SU by borrowing money from the state.