Tuition is Free, But Student Debt is Steep: Why in Sweden?
|December 22, 2013||Posted by Staff under High Cost of Land|
College in Sweden is free but students still have a ton of debt. How can that be?
This 2013 excerpt of Quartz, May 31, is by Matt Phillips.
Swedish colleges and universities are totally free. But students there still end up with a lot of debt. The average at the beginning of 2013 was roughly 124,000 Swedish krona ($19,000). Sure, the average US student was carrying about 30% more, at $24,800. But: College in Sweden is free.
That’s not even all that common in Europe anymore. While the costs of education are far lower than in the US, over the past two decades sometimes-hefty fees have become a fact of life for many European students. And yet, students in Germany and the UK have far lower debts than in Sweden.
About 85% of Swedish students graduate with debt, versus only 50% in the US. Worst of all, new Swedish graduates have the highest debt-to-income ratios of any group of students in the developed world — somewhere in the neighborhood of 80%. The US student debt average is more like 60%.
Costs of living in Sweden are high, especially in cities such as Stockholm, which regularly ranks among the world’s most expensive places to live. But again, this stuff isn’t free for students in other European countries either. So why do Swedish students end up with more debt? In Sweden, young people are expected to pay for things themselves.
Despite nonexistent tuition costs, Sweden has a virtually 100% uptake rate on student aid.
Swedes, like other Nordic Europeans, have an independent streak. They leave their parental homes earlier than almost all their southern neighbors. One study found that just 2% of Swedish men lived with their parents after the age of 30. In Spain, a quarter of 30-year-old men still are shacking up with mom and dad; in Italy it was around 32%.
In Sweden, students are viewed as adults, responsible for their own finances. Compare that to countries like Germany, where any aid from the state agency that doles it out, known as BAföG, is premised on parental income. In Sweden, the entire system is aimed at severing the financial link between parents and young adults.
Ed. Notes: The author did not break down the typical student’s budget but in places of high costs, the highest is usually the location on which sits one’s housing. But paying a lot for a residential site need not be a problem.
All the society has to do is recover its socially-generated value of its land. Then disburse the revenue back to citizens. Its government can levy a land tax or require Land Dues to redirect spending for land into the public treasury then pay out dividends to the citizenry as their share of the worth of Earth in their nation.
Already Aspen CO and Singapore do something similar. It’s sort of like Alaska’s oil dividend, but from the most widespread natural resource — surface land. In places of bountiful resources and few people like Sweden, the “rent” share could easily be enough to obviate student debt.