The DEA think tank released a report this month showing that students from affluent families receive most of the benefits of Denmark’s generous student funding program, rather than young people from low-income groups. Although student funding has contributed to equality and social mobility, barriers remain for the poor.
The to study, by DEA Chief Economist Kristian Thor Jakobsen, is titled Resource-rich youth receive the most LL. SU is the acronym for Student Funding Program.
“We can conclude that the SU has not become the social ram that we originally thought,” writes the weekly. Weekendavisen August 13.
“The SU, which now costs the government 21 billion Danish kroner [US$3.3 billion] per year, it is actually more of a mutual aid table for young people from wealthy families while those from the poorest families have to do with the crumbs.
The study was made possible by Danish population registers, which are among the best in the world. In addition to demographic data, they contain a range of information that can be used to monitor the social protection system.
For this study, data was collected on people born in Denmark in 1973, 1978, 1983 and 1988, who lived in Denmark on their 18th birthday, and the student funding they received between their 18th and 30th birthdays. These data were matched with data on their parents’ earnings when they were 18 years old.
The best Danish league in the world
The Danish student funding system was introduced in the early 1970s and has been reformed several times. Annual government spending doubled from 2000 to 2020 for several reasons, one being a greater tendency for students to enter higher education.
The basic principles are that all young Danes have the opportunity to undertake higher education and succeed, and that the SU is sufficient so that students do not have to work while studying, which for other Nordic countries is a must.
The Danish parliament has discussed the League on several occasions and has repeatedly decided that one of its fundamental objectives is to contribute to social mobility, so that it is not only students from well-off families who can benefit from ‘long-term higher education.
The Danish EU is more favorable than the funding of students in the other Nordic countries, because the amount of the annual aid is considerably higher everywhere and also because a much higher proportion of the EU is granted in the form of purse rather than loan.
The annual amount of student aid in 2020 was DKK 64,400 (USD 10,200) after tax, roughly double the amount Norwegian students receive and four times that of Finnish students.
The study also shows that students from households with the lowest average family income generate the most SU debt – 40,000 DKK (US $ 6,400) compared to half that amount for students from the 10% of families. the most rich. But this debt is still far less than what Norwegian students accumulate – on average 333,000 NOK (US $ 37,800) in 2018.
News from academia Jakobsen asked about the implications of the report. “I think it is always important to discuss if and how we can improve the Danish education system,” he said.
It was important to discuss student funding from a broad perspective on how to overcome the remaining challenges to social mobility. “We know that SU positively contributes to social mobility, helping students from low-income groups to enroll and complete higher education.
“However, since all students receive transfers from SU, we end up paying students in higher income groups as well. You would think that many of them would complete higher education even if, for example, the level of payments were lower, ”Jakobsen said.
“And although the League and free education have contributed to equality, they have yet to break down barriers in the education system for young people from low-income groups. “
In 2016, several MPs questioned the League’s growing spending and proposed a transfer from the scholarship system to student loans, as reported News from academia.
And in 2020, the parliament’s finance committee asked Finance Minister Nicolai Wammen to calculate the government savings resulting from the SU shifting from a grant to a master’s-level loan. It was calculated to 2.4 billion Danish kroner (380 million US dollars).
The main findings
The main results of the study are as follows:
Young people who grew up with relatively high-income parents receive the most SU between the ages of 18 and 30.
Among young people born in 1978, those whose parents earned in the top 10% of income received 16% of the total MU paid, while young people whose parents earned in the lowest 10% received 7% of the total MU. Thus, children of high-income parents received 2.2 times more MUs than those of the low-income group. This proportion fell to 1.5 times more for people born in 1988.
Until the age of 21, young people in the low-income group born in 1988 received the most MUs. But from that point on, SU was more widely attributed to young people from resource-rich households because of their head start in higher education.
Focusing on people who earned a master’s degree when they were over the age of 35, SU was paid to a significantly higher degree to students in the higher income group. From the 1973 cohort, this group received 25% of the EDs paid to the whole cohort; this figure had fallen to 20% for the 1988 cohort. Students of lower-income parents received only 4% of the total SU paid to this group.
Young people from low-income parents owe most of the debt to the League by their 30th birthday. Those with a bachelor’s or master’s degree have an average of DKK 44,000 (US $ 7,000) in loans to the SU, while young people from high-income families have an average of DKK 20,000 in debts to the SU. .
On average, young people from low-income households with a bachelor’s or master’s degree received DKK 487,000 ($ 77,000) from SU, both in the form of a loan and a scholarship, when they were entered their 30th year. The SU loan was equal to 9% of the aid received.
For those from well-off families, the loan share represented on average only 5% of the total of DKK 417,000 they had received. Students in the low-income group who do a master’s degree receive the most SU and are also the ones with the highest SU debt.
The head of the education and research division of the Danish Chamber of Commerce, Mads Eriksen, said News from academia may the chamber find the DEA study fascinating.
“We believe that grants should be turned into loans. Today, the League mainly goes to young people from well-off households. The money saved could be used at the elementary school level and to prepare people under 25 for vocational training or vocational training.
Camilla Gregersen – President of the Danish Association for Masters and Doctorates (DM) and Vice-President of Akademikerne, the Danish Confederation of Professional Associations, which has around 450,000 members – commented News from academia: “In my opinion, there is no doubt that the Danish League plays an important role in our society, especially from a democratic point of view.
“A number of eminent scientists analyzed a few years ago what the consequences would be if we changed the Danish union as we know it. ” Here is a connect to this study.
“They concluded that changes in the ED would have consequences for the behavior of young people with regard to school admission, educational choices, school completion and dropouts.
“In DM, we are on guard against SU. We cannot allow short-term savings to become an obstacle to young people’s access to education, regardless of their social background.
Mike Gudbergsen, President of the National Student Union of Denmark (DFS), commented News from academia: “As a society, we must strive for the objective that everyone can follow the education they want, whatever the social, educational or economic origin of their parents.
“The results of the DEA study show that in Denmark we still have work to do if we are to achieve this goal. “
However, he continued: “The fact that we still see an asymmetric distribution of SU depending on the economic background of students should not be taken as a sign of the weakness of the Danish SU system, in terms of its ability to help mobility. social.
“We know that the SU has a positive effect on social mobility in Denmark, and the current problems regarding the break with the social heritage issue would only get worse if Denmark reduced the level of the SU or reorganized the SU system in order to that master’s level students should take out a loan from the league.