Study credits: making student’s life easier or harder?

By Ieva Cielava

Aproximately 20 percent of all the students, who study at the University of Latvia, are using study credits to pay for their education, according to representative of Credit Granting Commission at the University of Latvia. This same official says that every year 140 – 160 students from the University of Latvia rotate from the pay group to the budget group. Some of the sources also speculate that every year as many as 140 – 160 students may also rotate out of the budget group. Or even more, if the amount of budget places is reduced, as it was for the Faculty of Social Sciences in the Latvia University of Agriculture, which is governed by the Ministry of Agriculture.

The beginning of the academic year for students at Latvia University of Agriculture was confusing. “In October they announced the results of the rotation – many students had lost their budget places; I did as well. So we had to pay for September, because the academic semester was already in the middle of its cycle,” says Ingūna, a student from the faculty of Social sciences.

The day, when rotation results were announced, was the last day when students could apply for study credits. “Only one girl applied for the credit, the rest of us couldn’t figure out in one day what we should do,” Ingūna remembers.

All this mess with study credits came about in July because the new Government of Latvia started to work, changes were needed for the country’s budget and as a result of the changes, faculty of Social Sciences lost many budget places because this faculty is not a priority for the Ministry of Agriculture, which is in charge of the Latvia University of Agriculture, says a representative of the University. Many students including Ingūna moved to part-time studies, which was a way for students to save up to 400 lats a year.

Kristīne Jakubovska, the press secretary of the Swedbank, one of the banks which offer study credits to students says the amount of study credit requests has grown in the last few years. Requests for credits as well as problems with guarantors are now issues of concern

Information in the home page of Swedbank shows that students, who are less than 21-years-old, must have a guarantor who gets 200 lats as a regular income in a month, after paying taxes and long-term credits. “In the current economical circumstances, students have problems with finding the guarantors, who could conform to these demands,” Jakubovska says.

Exceptions are possible for orphans (younger than 24-years-old) and students from poor families; they can try to get a guaranty from the selfgovernment of their place of living, says a representative of the Credit Granting Comission at the University of Latvia.

If a student pays all the credit payments on time and doesn’t have any debts, the student shouldn’t worry even in case of a guarantor suddenly becoming jobless. Jakubovska says the bank understands the economical situation in our country. If a student is loyal to all the demands from bank, the student cannot suddenly lose the credit

Before taking a credit for studies, it is worth considering that there are two types of credits. One bank every year wins the contest from the government and can offer the students a state guaranty for the credit, this year it is SEB bank. It doesn’t mean that students can get along without a guarantor, but the state gives the bank a guarantee, that if the credit taker has some sudden economical problems, the state will pay 90 percent of the amount of the money. That provides a very attractive credit percentage, only percent, explains the Credit Granting Comission.

There are four banks in Latvia offer study credits: Swedbank, SEB bank, Latvijas Krājbanka and Nordea.