Costs of study, student income, and study behaviour in Denmark.
10. Developments in the field of study costs and economic support for students since the 1960s.
10.1. The essential features of development in the last twenty to thirty years
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Until the early 1960s the economic support system was reserved for needy students with good academic results. The system was based on discretionary modest grants and a possibility of obtaining loans.
The 1960s
In 1964, the state guaranteed student loans by the banks were introduced as a way of sharing
student support more fairly between taxpayers, parents and the students themselves.
During the 1960s different commissions were set up to map out the economic conditions of students at higher education studies. A report from the " Von Eyben"-committee was submitted to Parliament in 1965. The report emphasised the importance of increasing the economic support of students to promote social equality and a democratisation of the higher education system. The main aims were
Furthermore, the state grant and loan should be based on objective criteria contrary to previous practice.
The 1970s
In 1970, the first Act on The State Grant was passed in Parliament in. The elements of the support programme were in keeping with the recommendations of the "Von Eyben"-committee and was a combination of grants, state loans free of interest during education but interest-bearing after graduation, and the fully interest-bearing bank loans guaranteed by the state.
The State Grant Act of 1970 caused an increase in public expenditure in a decade characterised by general deficiency. Already in 1975, the Act was altered so that the subsidised state loans were abolished and replaced entirely by the fully interest-bearing bank loans. This resulted in a sharp rise in the uptake of bank loans in a period with rising interest rates.
The 1980s
By the 1980s the effects of the abolition of the subsidised state loans became obvious. The students, not to mention the graduates, found themselves in deep debt. The dissatisfaction with this situation grew, and student-organisations as well as different political parties demanded that something be done. At the same time, there was a tendency among students to spend far longer studying compared to what was prescribed. Ten years at university was not unusual before finishing an education with a nominal duration of 5 years.
In 1982, in order to ease the debt situation, a special need - based support program was introduced for debtors repaying their bank loans, and the state subsidised student loans were reintroduced.
In 1987, a special Act on cancellation of student debts was passed by Parliament.
In 1988-1989 a radical reform of the study support program was carried through by the opposition in Parliament. The reform, named "the voucher reform" (in Danish: "klippekort-reformen"),provided a number of "vouchers" that would correspond to the number of months the course was supposed to last, with an extra 12 "vouchers" for students who changed to another course or gave up their studies within their first year of study. This was combined with very tight activity regulations. To reserve the right to receive the grant, the student had to show that he or she was studying actively. Passing exams was the proof. If a student failed to pass an exam or simply didn't attend a prescribed exam, the payments would be stopped until the student was again "in step". The "voucher system" consisted of grants somewhat larger than before, combined with low-interest state loans, and an abolition of the state guaranteed bank loans.
The reasons were, as mentioned, the large debts and the extremely long periods of study. One of the major reasons for the long periods of study was the widespread simultaneous employment. The solution of the problem was believed to be provision of a viable economic position for the students, without reliance on outside employment. Another condition to fulfil to obtain the grant was therefore that the student could have a rather limited income beside the grant. This was imposed by setting different "free amounts" depending on the students’ status.
The reform was fully implemented by 1989. Since then it has undergone several changes. However none of these fundamentally alters the basic ideas of a flexible system in which the individual has to take responsibility for making the grant, the number of "vouchers" suffice.
The 1990s
In 1991, the deduction of "Pay-As-You-Earn" tax from the grants was introduced. The medium "free amount" was increased by 10 per cent and the highest by 18 per cent to allow higher private earnings without having the support reduced.
In 1993, support for all recipients in higher education became independent of parental income. In the event of childbirth mothers became entitled to 6 extra monthly grants (6 "birth-vouchers").In 1994, the finalisation loans were introduced, as a helping hand for students running out of "vouchers". New mothers were entitled to 12 extra "birth-vouchers" and new fathers to 6 extra "vouchers".
In 1996, the right to obtain up to 70 "vouchers" (corresponding to a total of 6 years of study) in higher education was introduced and the "activity" criteria was considerably relaxed. Students were now considered "active" as long as they were not more than 12 months behind exam requirements. Grants for the 19 year-old recipients following youth education programmes became dependent on parental income, combined with the introduction of the right for all 18 and 19 years old students in youth education, to receive a minimum grant independent of parental income. The lowest "free amount" was increased by 30 per cent and the loan amount by 19 per cent. Finally the grant rate for students living with their parents was reduced by approx. 10 per cent.
1997: Discount for the use of public transport for grant recipients in higher education was introduced.
1998: The Law on cancellation of student debts was amended in order to relax the conditions for obtaining cancellation.
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Apart from a reform emphasising the positive, flexible elements of the "voucher system" and a simplification of the system that was carried out in 1996, there has within the past few years, been little discussion on the State Education Grant and Loan Scheme. In Denmark reform discussions are partly institutionalised in "SU-rådet" (The State Educational Grants and Loans Scheme Council"), consisting of members appointed by the Minister of Education. The council is free in its own right to debate matters of importance for educational support and in case of reform the council is heard.
In an attempt to identity possible future problem areas, we have looked into the findings of the recent survey on user satisfaction (See Appendix C) to see whether the support recipients are satisfied or not, and into the findings of the survey among students at the University of Copenhagen (See Appendix B) to see, to what extent the support scheme is attractive for the students.
The main result of the survey on user satisfaction, was that a full 92 per cent of all those replying were satisfied with the support scheme as a whole, and the service offered. Among the support recipients in higher education, a full 94 per cent were satisfied.
As to their standard of living as recipients of student support, 81 per cent of those replying in youth education and 63 per cent of those replying in higher education proved to be satisfied with their standard of living.
As to the flexibility rules, the picture proved to be more variable. On the one hand, 74 per cent were satisfied with the 6-year "voucher"-period; on the other a full 49 per cent, were dissatisfied with the maximum limits imposed on their income from gainful employment (the "free amounts") in order to obtain the full range of support. They considered them to be too low.
This proved to be the main reason for dissatisfaction among the support recipients in higher education even though the "free amounts" have been increased at several occasions in the 1990s.
To get a picture of how attractive the current support scheme is to students in higher education, we have to turn to the survey of students at the University of Copenhagen (See Appendix B) in 1996, wich involved both support recipients and non-recipients.
In tables 25 and 26 below from this survey are shown the proportion of students in different age groups in higher education who did and did not receive support before and after the reform in 1988/89, or in other words, how attractive the current support scheme is for students in higher education.
Table 25. Support recipients and non-recipients among students enrolled in 1985 after 2 years of studying distributed by age.
| Age | Support recipients | Non-recipients |
| ------per cent horizontal------ | ||
| below 21 years | 78 | 22 |
| 21 - 24 years | 75 | 25 |
| 25 - 30 years | 38 | 62 |
| 31 years or over | 16 | 83 |
Source: "Statens Uddannelsesstøtte - et effektivt uddannelsespolitisk styringsinstrument?", speciale 1997
Table 26. Support recipients and non-recipients among students enrolled in 1990 after 2 years of studying distributed by age.
| Age | Support recipients | Non-recipients |
| -------per cent horizontal------- | ||
| below 21 years | 95 | 5 |
| 21 - 24 years | 83 | 17 |
| 25 - 30 years | 56 | 44 |
| 31 years or over | 27 | 73 |
Source: "Statens Uddannelsesstøtte - et effektivt uddannelsespolitisk styringsinstrument?", speciale 1997
The higher level of support after the reform has evidently made the support scheme considerably more attractive. The proportion of non-recipients was generally lower among students enrolled in 1990 than among students enrolled in 1985. Among students in the age group of 25 - 30 years the proportion of non-recipients has, for example, dropped by a full 18 percentage points to 44 per cent among students enrolled in 1990 from a full 62 per cent among students enrolled in 1985.
Non-recipients still account for a very large proportion of the older students: 44 per cent among students of 25 -30 years of age, and a full 73 per cent among students of 30 years of age or over.
As mentioned in section 10.1., one of the intentions behind the current support scheme was that the support should be of a size allowing students to study without having to undertake too much gainful employment to make a living.
As shown in table 18, 71 per cent of the non-recipients had more than 70 work-hours per month.
As also mentioned in section 10.1., one of the intentions behind the current support scheme was that no academically gifted individual should refrain from studying because of poor economic circumstances. The figures in table 25 and 26 do not however include those who have refrained from participating in education.
This taken into consideration the current support scheme does not seem to be as attractive for students more than 25 years of age than to students below this age.
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