How Swedish students build up unsustainable debts while studying abroad


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Monday, 15 August 2011
Since 2005, the number of Swedish students with huge debt to the tone of Skr1million owed to the state student loan company, CSN has more than doubled.

Almost everyone who studies with a debt of more than Skr1 million have been studying abroad. Study abroad therefore has been seen as a source of enormous debt growth for students.
Sweden is a country obsessed with seeking knowledge from everywhere where know could be lurking as such for a small country, people go international to seek knowledge. As such more and more people choose to add all or part of their training abroad - a total of 30,800 people studied abroad with student loans in 2010.

But this is being seen as a very expensive business. Since 2005, the number of students with very high debts has more than doubled.
In 2005, around 300 people had debts of over a Skr1 million. In 2010 there are about 700 people, according to data CSN developed for the Swedish daily, Dagens Nyheter (DN). All but seven have been studying abroad.

“We are concerned about this. It is never appropriate to have such a high debt burden as it is difficult to pay back much money,” says Annika Follin, Head of Unit for student loan assessment at CSN.

For those who choose to study six years in Australia, a school with tuition fees end a student with final bill of around Skr1.2 million.
A four-year education in the United States can provide study loans to almost Skr 700,000.

“Under current regulations, you can reach these levels. Go a long education abroad at a school where you have to borrow the maximum amount of tuition fee, then you up in a million,” says Annika Follin.


27 percent of the foreign students who became repayable in 2010 had a study debt of at least the 300 000. The corresponding proportion among those who studied in Sweden was 4 percent.

For studies in Sweden, a student can borrow up to Skr1,489 per week. Living and studying in the U.S., UK or Australia will cost more, and loan amount is adjusted for cost certainty. In Australia, for example, the amount is Skr3, 000 per week, in Japan and the United States Skr2,900.

In addition, those studying abroad receive an additional loan for the additional costs of Skr1 350 per week.
Student support system for study abroad is being reviewed. Last spring, the government presented a report on studies abroad which is now out for consultation.

With the new proposal, the loan amount will no longer be adjusted to the cost situation in the country. To compensate for students who are studying in countries with higher cost level than in Sweden, a new additional cost for the loans will be introduced.
 This will mean that there will students will continue to borrow large sums of large sums to study abroad.
“But if the proposal goes through, it will be impossible to get such large loans for as long as twelve semesters. By contrast, those who read a really expensive educational program will be able to borrow more money over a shorter period of time,” says Annika Follin.
By Team

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