The College Debt Crisis That Does Not Exist in Scandinavia

In a recent welcoming speech and question and answer session for college students at Amherst College in Massachusetts, Supreme Court Justice Sonia Sotomayor mentioned that by the time she had completed seven years of higher education (four as an undergraduate and three in law school) she had accumulated a total of $15,000 in college loans. A similar level of student loan indebtedness today is not even remotely feasible. The median student loan indebtedness for a law student is $117,000, according to NPR quoting from the National Postsecondary Student Aid Study. Other studies show that law students on average accrue more than $140,000 in debt.

Sotomayor referred to this sorry state of student debt affairs as “our greatest challenge as a nation.”

Not an Issue in Scandinavia
Such serious college debt and education-access inequality issues, along with the resulting financial malaise they bring to low-income families, are not taking place in Scandinavia (Denmark, Norway and Sweden), and it has not gone unnoticed. Presidential candidate Bernie Sanders, for instance, has consistently pointed toward Scandinavia as having an education funding model we should seriously consider emulating. President Obama has repeatedly proposed free community college. Elizabeth Warren has been stressing increases in state and federal funding, and Hillary Clinton recently presented her $350 million debt-free tuition proposal. Candidate for U.S. Senate in Wisconsin Russ Feingold’s Progressive Change campaign emphasizes the economic anxieties both students and parents are facing caused by the rising unaffordability and inaccessibility of higher education.

The realities of the U.S. college debt crisis, however, are not going away anytime soon. At present, we as a nation are not legislating anything to help solve the college debt crisis.

Free Tuition and Equal Access
In Scandinavia, higher education is financed through its socially democratic taxation systems, meaning tuition is free to any citizen who meets the admissions requirements of their public colleges and universities. A low-cost or free education mindset permeates throughout Scandinavian societies, beginning with day care and preschool, which are also government subsidized based on income, and proportional, based on the number of children in a family. In addition, inequality of access to education is not an issue in Scandinavia.

Denmark, Norway and Sweden are all part of the European collective of 49 countries known as the Bologna Process, a higher education reform movement that focuses on education quality, the employability of college graduates, admissions equality, and increased compatibility among European higher education institutions.

The kindergarten through graduate-level higher education system is comprised of elementary school (ages 6–13), lower secondary school (ages 13–16), upper secondary school (ages 16–19) and higher education. Earning a bachelor’s degree takes six semesters, or three years, and earning a master’s degree takes two years.

Thriving in a World of College Debt
Scandinavian students of all stripes accumulate relatively large amounts of college debt for living expenses if they strike out on their own, funded by taking out government-subsidized loans. Students who can live at home with their parents and can commute to campus while pursuing their degrees accumulate hardly any debt. In either case, their total debt after graduation is much less than U.S. post graduates, especially at the master’s degree level, due to not having to dole out all those tuition dollars.

The Scandinavian Financial Aid Systems
Each country has a distinct student loan and grant system in place. Denmark has the most generous college loan and grant support system, called the State Educational Grant and Loan Scheme (SU). All full-time college students over the age of 18 are entitled to receive a taxable grant. If they live away from home on their own, they can receive $890 per month. If they stay at home, the size of the grant is dependent upon their parents’ income. All at-home students are entitled to a minimum of $138 per month and can receive as much as $246 above that amount. These grants are made available for a period of 70 months total.

Legal Danish citizens who are students can also borrow up to $456 per month over and above what they may have qualified for in a grant. There is also a generous loan provision allowed for those students who have not completed their studies over the course of the 70 months grant funding they have used up, called a “completion loan,” as explained by the Head of Section at the Agency for Higher Education Maisa Mahmutovic. These non-completers can borrow up to $1,177 per month. “The condition to be approved for this loan is that the student is able to complete his/her studies within 12 months,” she said.

To cover common college living expenses in Norway, students take out loans subsidized through the Norwegian State Educational Loan Fund, called Lånekassen, meaning “make education possible.” A full-time Norwegian college student can receive up to $12,330 each year as basic support. “The amount is given as a loan, but up to 40% of the loan can be converted into a grant, said Hanne Bjertnes, Lånekassen senior communications advisor. “ There are three conditions for this conversion: The student must live away from his/her parents, must pass all exams and must not exceed the limits for income and assets determined by the regulations. If income/assets are higher than the limit, the amount of the loans that can be converted into a grant will be smaller.” In order for a single applicant in 2015 to receive the 40% maximum grant, his/her net assets could not exceed $44,344.

Sweden has its National Board of Student Aid, or Centrala studiestödsnämnden (CSN). Full-time college students qualify for 240 weeks (12 semesters) of financial assistance that total about $366 per month in grant funds and $929 per month in loans while they are attending classes.