On Tuesday, July 6, the government Ministry of Education and Science (IZM) provided EUR 163 900 to provide additional funding for the availability of state-guaranteed studies and student loans.
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This additional funding is needed because of the higher demand for study and student loans this year, and some educational institutions have also increased tuition fees.
“The University of Latvia (UL) has informed about an average increase of 7% in tuition fees, and the UL is the higher education institution where students conclude credit agreements the most. Thus, the additional funding directed by the ministry for the autumn semester of 2021 will ensure the consequences of the protracted emergency situation and the pandemic, “the communication department of the Ministry of Education and Science writes in a press release to the media.
In 2020, the ministry introduced a new lending model, removing the requirement for a second guarantor, which was often a barrier to obtaining credit. Currently, only one guarantee is provided by the state development financial institution “Altum” in the form of a portfolio guarantee. Consequently, the availability of credit no longer depends on the student’s family’s financial status and the parents’ ability to provide a guarantee.
Also, the new study and student lending model is more advantageous than the lending solution applied in previous years, as it envisages that for every one euro guaranteed by the state, the bank issues at least four euros to students from its own funds, which mainly enters the education system.
Last autumn, the demand for state-guaranteed study and student loans significantly exceeded the trends of previous years and the planned increase, reports the Ministry of Education and Science. This was facilitated by the availability of study credits as well as the emergency situation and changes in the labor market caused by Covid-19, as students’ job opportunities decreased and thus their ability to cover tuition fees and living expenses themselves. Parents of many students also declined in income, reducing their ability to support their children’s studies.
It has already been reported that Latvian Students’ Union (LSA) has repeatedly called for this funding to be made public. Otherwise, about 500 students might not be able to get a higher education. The LSA welcomes the new lending model.
Delfi has also already written that the Ministry of Education and Science plans to establish a new scholarship fund by the new academic year, which would provide financial assistance in the amount of 160 euros to students from large families for 10 months a year.
The Ministry is currently developing a regulatory framework for a scholarship fund for students from large families. “However, taking into account that scholarships cannot fully cover tuition fees, state-guaranteed loans are one of the complex solutions for access to higher education, including for young people from large families,” representatives of the Ministry of Education and Science reported.
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