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Competitiveness / Education and Research



The quest for higher education is showing a negative side as more students finding it hard to pay their study loan

Monday, 13 May 2013
Recently in the UK, there has been increased bashing if higher education. With growing unemployment and underemployment, many commentators and political pundits have blamed some of that to rampant university degrees. One proof of the negative side of university degree though has been the inability of graduates to pay back their study loans.

In Sweden there has been limited bashing of higher education but with the growing difficulties of graduates paying back their student loans, there could something of that sort coming here.
However, Sweden is different in that tax payers money given to student to study here is not seen as waste, instead it is seen as investment and thus the difference from places such as the USA and the UK.

In the U.S., for example, the government data show that student loans soared to about 40 million with Americans now owe some 1.000 billion dollars for their studies. In the wake of the economic crisis, it became more and more difficult to pay back. Some 17 percent of the borrowers are at least three months behind on their payments.

In Sweden  a new warning has come up that similar situation as in the USA could be seen here. According to Swedish business daily, Dagens Industri,  an investigators at academic union Dik, warns that similar development is coming to Sweden.
"The trend is the same in Sweden, although this trend is not as dramatic as in the U.S., "he says, according to the paper.

By the end of last year, 1.4 million Swedes are registered with the Central Student Grants Company, CSN, owe on average Skr 133,000 each. In 2012 the debt had grown by 2 per cent to a total of Skr194.4 billion said the paper.

Highest average debt had been from borrowers in Stockholm with Skr144,900, while in Smaland people live up to their reputation. Borrowers in Jönköping County had the lowest average debt of Skr109,200.

At the same time, during 2012, CSN was expecting Skr11.7 billion but only got Skr10.7 billion.
"We get more and more debt and more and more borrowers. Now we also have more people who can not pay out their loans, "said Bo Westas from the consulting company Dik to Dagens Industri

In two years, the number of cases in which the CSN has taken Enforcement action have grown by 4,000 cases. At the beginning it was almost 90,000 Swedes who had difficulties with unpaid student loans totalling Skr1.1 billion, according to the Enforcement statistics.

The Worker's Union, Saco has done studies wage evolution and it shows that an academic degree is profitable for most, compared to those who start working right after high school. But there are students who will never be debt free after university studies.
"For groups that have low wages and long period of study, it may be that the debt never decreases, "said Thomas Ljunglöf, statisticians at Saco and exemplifies the librarians who were trained in the 1990s.

Sacos calculations is based also on the view that graduates get a job that fits into their education and their line of training, not those working part-time or those who end up unemployed.

With unemployment growing and the job market getting tighter, it looks like more will be deterred from going to further education.
by Team

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