According to statistics compiled by the Student Loan Fund (LÍN) every September, applications for student loans have decreased, especially for overseas studies—by approximately 25 percent compared to September last year.
Students at Bifröst University. Photo by Páll Stefánsson.
“Not long ago the exchange rate of the Danish krona was ISK 13. The difference is vast between receiving DKK 50,000 for ISK 13 or for ISK 24, as is currently the case,” Hlödver Bergmundsson, manager of LÍN’s loan division, told Morgunbladid.
Hjördís Jónsdóttir, managing director of the Association of Icelandic Overseas Students (SÍNE), said she knows of many cases where people have canceled their plans of studying abroad because of the economic situation.
One of them is Berglind Sunna Stefánsdóttir, who was planning to study in Denmark. She said the exchange rate of the Icelandic króna was a large factor in her decision. However, two of her friends are pursuing their plans to study abroad, in Scotland and the US.
“They do so conscious of being heavily indebted once they graduate,” Stefánsdóttir said, explaining that it hurts to think that two years ago comparable university courses in foreign countries, including the cost of living, cost half the current amount.
According to Fréttabladid’s sources, the Ministries of Education and Social Affairs are working on proposals of cooperation between the Unemployment Insurance Fund and LÍN that assume a 20 percent increase in student loans.
Students have been complaining that unemployment benefits are higher than student loans and that student loans have not followed the price developments over the past few years. There have been cases of students being registered as unemployed.
The aforementioned proposals also include an initiative to prevent such double registration. That way, money is saved at the Unemployment Insurance Fund that can be transferred to LÍN. The two funds must cooperate closely to prevent abuse of the system.
Click here to read about planned cuts to Icelandic universities.