The case in summary: Student loan interest rates are now at their highest level in 15 years, which worries students who will start studying in the autumn. The average debt for students who completed higher education in 2023 was NOK 427,000, and Lånekassen expects a record year for payment deferrals. Before 1997, rent was politically controlled, and there are now proposals to reintroduce this system to make repayment more predictable. John Magne Pedersen Tangen, head of NTL Ung, believes that the high interest rate can lead to some opting out of higher education because of the debt burden. The Ministry of Education has stated that it is not appropriate to return to a politically controlled interest rate, as this would be costly and not targeted at borrowers with weak finances. Despite the high interest rate, both Lånekassen and consumer economist Hallgeir Kvadsheim believe that the student loan is still a favorable loan scheme because of the many advantages it provides. The summary is made by an AI service from OpenAi. The content is quality assured by news’s journalists before publication. – It’s stupid. I hope the interest rate is lower when we finish studying. Malin Valdemarsen and her friends Oline Lutcherath and Sina Yonathan wait for the airport bus in Sandnes. They will start studying in Bergen in the autumn. – It’s a bit awkward. I’ve always heard that student loan interest is the best interest you can get, says Oline. The prospective students are happy that they will not have to pay off the loan now that the interest rate is so high. It is only when you have finished studying that the loan must be repaid. Photo: Simon Elias Bogen / news But now student loan interest rates are high, and the curve is pointing upwards. The average debt for students who completed higher education in 2023 was NOK 427,000, figures from Lånekassen show. Over 5.2 per cent interest Not since 2009 has the interest on the student loan been higher. The interest rate is now 5.214 percent. In September, it increases to 5.242 percent. news has been sent the interest rate trend from and including 1997. We therefore have to go to the time around the financial crisis to find the same interest rate. In just two years, the floating rate on the student loan has increased by 3.4 percentage points. Before 1997 renta was politically controlled. In other words, the politicians decided what the interest rate should be. Not the interest rate market. The group of friends who will start studying have all three taken out the maximum student loan this year. – There are not very many people who can study without a student loan, says Malin. The maximum student loan for the coming school year is over NOK 150,000. Photo: Simon Elias Bogen / news Wants the politicians to manage the rent John Magne Pedersen Tangen is leader of NTL Ung. He believes that the arrangement as it is today is not good enough. He wants politically controlled interest rates back. – When interest rates are so high, you notice when you are about to enter the housing market, for example. The burden will be great, says Tangen. Renta believes he should stay at a low acceptable level, which means that you don’t feel the burden of sitting with a student loan becomes as great as it is now. – I am afraid that the high interest rates that we are now seeing are helping to erase the social mission that Lånekassen has, namely to make higher education possible for everyone, says the head of NTL Ung. Leader of the Norwegian Civil Service Association Young, John Magne Pedersen Tangen. He believes that a politically controlled interest rate will lead to fewer worried payers of the student loan. Photo: Norwegian Civil Service Association Tangen believes that high interest rates can lead to some people not taking up studies because they are stuck with a lot of loans. – We cannot afford for people not to dare to invest in higher education. Reminds that the state profits from high interest rates Tangen receives support from parliamentary representative Mímir Kristjánsson (R). – People struggle to pay bills these days, and the last thing they need is to pay even more interest on their student loan in addition, he says. Storting representative for Rødt, Mímir Kristjánsson. He finds it difficult to understand why the state should enrich itself on high interest rates. Photo: NTB In practice, the Storting representative believes there should be a minimum interest rate and a maximum interest rate, within which the student loan interest rate can rise and fall. Then he says we get a stable and predictable interest rate. – It is not a private bank or a private company that collects the student loan right. It is the state. The state in Norway does not need to make more money than usual because interest rates are high, says Kristjánsson. Today, there are around 790,000 of us paying off our student loans. 764,000 have floating interest, while 15,000 have fixed interest. Do you want a politically controlled student loan interest rate? Yes, that sounds like a good idea! 🤩 No, the system is fine as it is today😇 Show result Ministry of Education: – Not applicable The Ministry of Education tells news that it has not been considered appropriate to return to a politically controlled interest rate. – A system with politically controlled interest rates will be very expensive and not targeted at borrowers with weak finances, says State Secretary Ivar B. Prestbakmo (Sp). State Secretary in the Ministry of Education, Ivar B. Prestbakmo (Sp). He recalls that the current government ensured the largest increase in student aid in 15 years. Photo: Fathia Mahmoud Farah / news In contrast to Kristjánsson, he says a politically controlled interest rate will reduce stability and predictability. – Then interest rates will follow political winds and be governed by governments’ specific political priorities, says the state secretary. And to the question of a maximum interest rate, the Ministry of Education states that it has not been considered either. Refers to advantages of the student loan Anette Bjerke is director of communications at Lånekassen. She says the student loan is a favorable loan, even if the interest rate is now high. – We have a full 36-month postponement of payments if it is financially tight for a period, she says. Communications Director Anette Bjerke at Lånekassen. Photo: Hege Aas They also provide help in the form of further deferrals and cancellation of interest in the event of disability, unemployment and a number of other conditions which mean that your income is unexpectedly low, adds Bjerke. Hallgeir Kvadsheim: – Still a favorable loan Consumer economist Hallgeir Kvadsheim says the student loan is still a favorable loan scheme even though the interest rate is now high. The reason for that is the advantages that Bjerke in Lånekassen mentions. – If you have other loans, such as mortgages, car loans and consumer loans, then you must prioritize them. The interest on those loans is probably much higher than the student loan, recommends Kvadsheim. Economist Hallgeir Kvadsheim, known from the TV program Luksusfellen. Photo: Tuva Skei Tønset When news asks him if one should return to a politically controlled interest rate, he replies: – A politically controlled interest rate would probably have been better for the students. But it is a decision that must be made politically, replies the economist. – Better with a politically controlled interest rate The prospective students going to Bergen agree that a politically controlled interest rate would be better. But luckily for them, they don’t have to pay off the student loan. They start paying that when they finish studying. – But I hope the interest rate is lower anyway when we finish studying, says Malin Valdemarsen. Hey, you! Do you have any thoughts you’re stuck with after reading this case? Or maybe you have tips for something else I can write about? Feel free to get in touch! 👇 Do you have something on your mind? Use the comment field below: Hello! Welcome to dialogue at news. Since you are logged in to other news services, you do not have to log in again here, but we need your consent to our terms of use for online dialogue Published 11.08.2024, at 15.53
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