Exchanges are the low-debt option for studying abroad

A Swedish study shows that students who arrange their own study abroad accrue nearly twice as much debt as exchange students and that exchange students do not owe significantly more than students who never study abroad.

The report, published by the Swedish Board of Student Finance (CSN) on 20 December, examined how much debt students had accrued when graduating after three to four years of studies abroad as ‘free movers’ during 2007 to 2009 and compared these figures with the debt accrued both by other students of the same study level going abroad on exchange agreements and by those students who only studied in Sweden.

The study examined the debt of 4,576 free movers, 2,414 exchange students and 91,686 students who studied only in Sweden. The report also examined if the loan-takers were having difficulties in paying the yearly instalments by the end of 2015.

In Sweden, graduates’ yearly instalments vary depending on the total loan amount, and the loan has to be paid within 25 years or before you turn 60.

The report found that free movers had on average a study loan of SEK384,000 (US$43,000) on graduation, compared to exchange students’ SEK206,000 (US$23,000), and SEK183,000 (US$20,500) for those who had only studied in Sweden.

Malin Leonardsson from CSN, who carried out the study, told University World News the report found that the free movers only paid back 86% of their annual instalments due, compared with 99% paid back by exchange students and 97% by students who had studied only in Sweden.

The report says this inability of free movers to meet their yearly debt instalment may be due to them having to pay significantly higher instalments compared to the other two groups and due to 25% of them living abroad by 2015, compared to 8% of the exchange students and 2% of those who had only studied in Sweden.

Agneta Bladh, the special investigator reporting on internationalisation of higher education in Sweden, said in 2018: “This is another argument for Erasmus and other exchange programmes. The CSN report also says that exchange students have the highest average income after graduating compared to free movers and to students studying in Sweden only. This is interesting information to students – and higher education institutions!”

She said the high debt level for free movers stems from them having to cover more in the loans, including fees, or in the case of medical students, from the length of the course.

‘A problem for internationalisation’

Jacob Adamowicz, president of the Swedish National Union of Students (SFS), said the key point is that a person’s financial situation should not hinder their ability to choose the education they want to pursue.

“As some of the higher costs for free movers are attributed to fees, it can also be said that the higher costs can be a problem for the internationalisation of higher education. Each country needs to weigh the benefits of internationalisation against the revenue from the fees,” he told University World News.

The report is limited to those who studied with study support from CSN some time between 2007 and 2009, received student loans for 120-160 weeks and who had student loan debt at the end of their studies.

The group of free movers was also limited to those who only studied abroad as a free mover, and the group of exchange students was limited to those who only studied abroad as an exchange student.

In the free mover group of 4,576 students, 43% had received support for studies abroad only, while 57% had received support for both studies abroad and for studies in Sweden.

Leonardsson said that the report did not distinguish between free movers who took a whole degree abroad and those who undertook only a part of their studies abroad. The report had no information on the income of former students who lived abroad after their studies, she said.

“There were also questions on what the average debts looked like when comparing students who had studied for the same number of years. That was one of the reasons for limiting the survey in the article to those who received loans for a certain number of weeks.”