Under the new Erasmus Master Loan Guarantee Scheme as many as 200,000 postgraduate students are in line for loans up to €12,000 to help them study for a one-year master’s degree in another European country, or €18,000 to support them financially on a two-year master’s abroad.

Launched in June by the European Commission, or EC, the scheme will receive over €500 million from the Erasmus+ budget, which the EC says will help to raise up to €3 billion in loans.

Erasmus+ Master Loans will be pioneered with €30 million worth of loans being offered by the Spanish bank MicroBank, the social bank of La Caixa.

These will be for both Spanish students pursuing postgraduate studies abroad and students from other Erasmus countries going to Spanish universities for a master’s courses.

The ambitious scheme is Erasmus_plus colourmeant to fill the gap in financial support for postgraduate students wishing to study abroad in one of the 33 Erasmus programme countries and will be rolled out in other European countries to help increase student mobility up to 2020.

The European Commission says the financial risk of the loans will be shared between the European Union and the participating financial institutions, thanks to support from the European Investment Fund.

No collateral will be required from students or parents to ensure equality of access.

Not jumping for joy

But not everyone is jumping with joy.

The European Students’ Union, or ESU, which represents student interests in 39 countries, has been critical of the master’s loans idea since they were first mooted three years ago.

It fears the loans will plunge students in more debt, despite EC assurances that the loans will be offered at favourable interest rates and have delayed pay back options to allow graduates up to two years to find a decent job before repayments begin.

The ESU says the Erasmus+ master loans lack a full income-contingency element to help the lower-paid and unemployed and argues that member states should provide grants to help less advantaged students study abroad.

Elisabeth Gehrke, chair of the ESU.

Elisabeth Gehrke, chair of the ESU.

Elisabeth Gehrke, chair of the ESU, said the Commission should work to support and encourage countries to create their own portable loan and grant systems.
“This is something the countries committed to do already in Berlin in 2003 through the Bologna Process.

“We cannot continue to indirectly subsidise this from a European level every time countries will not commit to internationalisation.

Increases student debt

“It is not sustainable, and the European Union should not be encouraging increased student debt and encouraging private banks to prey on students, especially in a time of major economic crisis.”

But Nathalie Vandystadt, European Commission spokesperson for education, culture, youth and sport, said: “The Erasmus + Master loans will provide more funding for students who wish to study abroad but may not be able to do so without support.

“Students can benefit from favourable conditions, making the scheme available to students from all backgrounds.

“With few national loans systems supporting studies abroad, the scheme will also help to overcome obstacles to student mobility.

“The new tool is an extra source of student funding, complementing the range of study grants available under the Erasmus+ programme.”

New student association hardens views

The European Students’ Union opposition hardened after the EC timed the launch of the master’s loans with an announcement of a new Erasmus+ Student and Alumni Association, or ESAA, to represent over three million Erasmus+ students in the period up to 2020.

The new association brings together four existing bodies and their local networks: Erasmus Mundus Students and Alumni Association, Erasmus Student Network, garagErasmus, or gE, and OCEANS network.

“Arranged marriage’

The ESU said the new umbrella organisation was the result of a ‘forced and arranged marriage’ and challenged whether it would really be independent of the Commission and private enterprise interests.

“The existence of ESAA is, of course, not a problem in itself. The problem comes when the European Commission claims the ESAA speaks on behalf of students”, said the ESU.

It also criticised Xavier Prats Monné, director general of the European Union’s Directorate General Education and Culture – or DG EAC – for what they claim was a suggestion at the Erasmus+ launch that students had up until this point only played a marginal role in reforming education.

“This could not be further from the truth”, said the ESU, pointing to the substantial role students have played since the founding of the Bologna University, including helping to make Erasmus such a success.

Elisabeth Gehrke commented: “The tactic of creating parallel or superseding structures controlled by policy makers is as old as students organising.”

No laughing matter

The ESU has been critical of the master loan scheme from the start, she added.

“The fact that the launch of the loan scheme was highlighted in combination with this attack on independent student representation must be someone in the DG EAC’s idea of a funny joke. We are not laughing. The dangers of student debt, and the right to organise are serious matters.”

Gehrke described the situation as ‘very worrying’ and added: “Since no clear answers had been given, we have no choice but to ensure that independent student organisations will be fairly represented. We will invite them to a meeting to see how we can help protect their right to organise.

“We will also be reporting the DG EAC and this process to the European Ombudsman.”

Not competing with representative bodies

European Commission spokeswoman Nathalie Vandystadt.

European Commission spokeswoman Nathalie Vandystadt.

Commission spokesperson Nathalie Vandystadt, said: “ESAA is a new organisation that aims to support over three million students and alumni of the Erasmus+ study programmes.

“It won’t in any way represent or compete with student representative bodies, but aims to improve their study abroad experience by bringing together the expertise of four existing support organisations.

“ESAA is fully autonomous in its decision making. As an important stakeholder in the field of education, the Commission will support its logistic and organisational set-up.”

Gehrke responded by saying: “If it is not going to represent students, how exactly can ESAA be a so-called important stakeholder?

“If ESAA is independent despite all support from the Commission, and internal voices saying otherwise, and not least tailor-made grants for them totalling €900.000, that needs to be proved not simply stated.”

* A version of this blog appeared under the headline ‘New loans scheme to make masters students mobile’ on the University World News website on 18 June 2015.