Foreign students owe Denmark 1.3 billion kroner in overdue loans

The debt to the Danish state resulting from unpaid student loans granted to foreign nationals has increased to 1.3 billion kroner.

Foreign students owe Denmark 1.3 billion kroner in overdue loans
Tax authorities in Denmark have struggled to recover overdue student loans from foreign students who no longer live in the country. File photo: Sarah Christine Nørgaard/BT/Ritzau Scanpix

The figure of 1.3 billion kroner was reported by broadcaster DR based on information from the government debt collection authority Gældsstyrelsen.

Overdue repayments on student loans granted to foreign nationals have therefore increased from 800 million to 1.3 billion kroner over the last three years, DR writes.

Going further back to 2018, a far lower figure was reported. Money borrowed by foreign students in 2017 formed 80 million kroner of the total 155 million kroner owed to Denmark for state student loans (statens uddannelsesstøtte-lån, SU-lån). However, this figure did not include foreign nationals who still lived in Denmark at the time.

The current total of 1.3 billion kroner is owed by 18,000 foreign nationals, giving an average debt of 72,200 kroner. Of the 18,000 foreign students, some 5,000 have since left Denmark, DR reports.

The figures reported by the broadcaster come from an access to information request approved by the state debt authority.

Foreign students – if they hold citizenship in another EU or EEA country – can take out the loan offered by the Danish state for students if they also qualify for the state student grant, SU (statens uddannelsesstøtte). The loan is often referred to as SU-lån.

The state student grant is the grant which the majority of students on higher education programmes in Denmark receive to cover their basic living costs.

Although you must normally be a Danish citizen to receive SU, foreign nationals (more specifically, people from EU or EEA countries) can also be eligible if they fulfil certain criteria. This involves applying for ligestilling – equal status – with Danish nationals and therefore being approved for SU.

READ ALSO: How can foreigners receive Denmark’s state student grant?

The issue of foreign students not paying back loans after leaving Denmark is not a new one. In 2018, the government said it would seek arrangements with the EU and individual countries to improve its ability to recover student loan debts owed by foreign citizens.

A right wing party called for Denmark to stop approving SU loans for foreign students while it remains difficult to recover debts.

“A series of ministers has promised improvement but there’s still not a lot to be seen,” Hans Kristian Skibby of the national conservative Denmark Democrats told DR.

“If the Tax Ministry is not capable of recovering the money through legislation, you’d be better off not continuing to pay out [the loans]. We need to make sure that repayment can take place according to rules that also ensure people pay the money back,” he said.

The left wing Socialist People’s Party (SF) called for unified rules in the EU to prevent students from leaving their debts unpaid but said SU should still be available to foreign students in Denmark.

“The rules are that if you offer [SU] to Danish students, you also have to offer it to foreign students. The EU Commission has said very clearly that this is part of the right to free movement for students. That’s why we also need to find a solution to recover the loans,” SF tax spokesperson Sigurd Agersnap said.

It should be noted that Danish nationals with overdue SU debt owe more on average than foreign citizens, according to DR.

At the end of 2022, some 120,000 Danes were behind on their student loan repayments. This group owes a total of 11 billion kroner, around 91,600 kroner per person.

Tax Minister Jeppe Bruus told DR that it was “criticisable” that SU loans were not being repaid to Denmark by foreign students.

“It is also annoying because it’s hard to recover the debt when foreigners leave the country,” he said.

“This is therefore something we are following closely and are doing what we can to recover the debt while they are in the country, but are of course also trying to improve recovery when they have left,” he said.

“As long as they are still in Denmark, we have just as good opportunity to recover their debt as we have for all other Danish citizens, so there we have a task I will be interested in,” he also said.

According to an analysis by trade union IDA, foreign graduates in Denmark provided a net contribution to the Danish economy of 26.8 billion kroner between 2007 and 2020.

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Eight Danish parties resist government’s university reform

Eight of parliament’s twelve political parties have urged the government to stop plans to reform higher education, which would see around half of all Master’s degrees shortened to one-year programmes.

Eight Danish parties resist government’s university reform

A joint letter sent by the parties to the Minister for Higher Education and Research, Christina Egelund, sets out the concerns the parties have over the plan.

Only one opposition party – the national conservative Denmark Democrats – is not signatory to the letter.

Presented at the beginning of March, the government’s higher education proposal is to create new Master’s degrees lasting one and a quarter academic years.

The degrees would be organised over two semesters followed by a major final assignment which would be written over the summer.

As many as half of the two-year Master’s degrees currently offered at Danish universities will be given the new, shorter structure should the proposal be adopted.

Another feature of the proposal is to increase the number of places on English-language Master’s degrees by 1,100 between 2024 and 2028, and by an overall 2,500 from 2029.

READ ALSO: What do proposed university reforms mean for students in Denmark?

The eight parties urged the government to come up with an alternative plan at an initial meeting last week, news wire Ritzau reports.

Egelund meanwhile told newspaper Politiken that “nothing here is ultimate” with regard to the proposal.

Nevertheless, the plan to make Master’s degrees shorter is a fundamental element of the government’s intentions for higher education, she said.

“I’m not standing at the entry to the negotiating room and asking them to take an oath to be faithful to the government proposal one-to-one,” she said.

“This is the reason why we invite to political negotiations. It is actually to negotiate. And that’s why I will be open-minded in looking at what concrete proposals [other parties] have when we meet for talks later today,” she said.

Mayors in Denmark’s four largest cities – Copenhagen, Aarhus, Odense and Aalborg – have each expressed criticism of the proposal. All of the mayors are members of the governing Social Democratic party and each of the cities is home to a university.

Academics and students have also been critical of the plan, arguing it will reduce the quality of higher education.