Government plans to raise interest rate on student loans

- in Aktuell, In English, News, Nyheter

The Swedish Government is suggesting a new reform, which will offer financial support to people who have already entered working life and give them a chance to educate or reeducate themselves. To fund the reform, there is also a suggestion to raise the interest on student loans. 

The financial aid is part of a larger reform to promote continuous education amongst the public, in preparation of a changing labour market that to a greater extent demands well-educated people. It will offer citizens a chance to continue their education, or to commence a new professional path.

The aid, planned to be set in action in 2023, is intended to offer people up to 80% of their salary during a period of time. To fund the support the government is proposing a raise of the student loan interest. The student loan is managed by the government agency CSN, The Swedish Board of Student Finances. 

The student loan interest rate, which has fallen considerably during the last decade, will be raised notably according to the reform. From 2023 the interest will go up with 0.5-0.6 percentage points. This year, the interest lies at 0.5%.

Preliminary calculations show that the raise will lead to an increased cost of interest by 1375 Swedish kronor yearly for a loan of 250 000, which is the sum that roughly corresponds to a full CSN loan for three years of full-time studies. The yearly increased cost of interest affects either the annual repayment sum or the time during which the loans is to be repaid, depending on the total debt. The interest rate will be raised for all loans taken from 1989.