Nordea Survey: Studies Will be Mostly Paid by Parents

During the survey¹ carried out by Nordea Bank  among young people aged 17 to 20 it was found that most of the respondents (57%) will study also if they will not get a state-paid budget place. One third of the students (30%) state that in such a case their studies will be paid by parents. Every fifth student (19%) will pay for studies themselves since they will combine studies and work, but 15% will use study loans offered by banks.

During the survey it was found that most (90%) of the youth are planning to acquire higher education. Only 10% of the respondents indicate that are not going to study at all. More than a half of the young people are planning to study also if they will not get a state-paid budget place (57%) and 20% consider the possibility not to study if their study costs will not be covered by the state. Only 4% of the potential students are planning to apply for studies, and 4% of the respondents have already saved up the funds necessary for studies by working previously. Every fourth young person (25%) has not yet decided on the potential sources of study financing.

Loan commitments are worrying, but there is low interest about the terms

Most of the respondents (76%) acknowledge that loan commitments cause worries. However, only 6% of the young people have studied all the bank offers to students; 28% of the respondents have noted offers by some banks, and more than a half (54%) have postponed their familiarisation with loan service offers to a later time.  

In choosing a loan, the basic criteria applied by the respondents are “favourable interest rates” (37%), “recommendations by parents or friends" (37%) and “the information received in a high school” (25%).

The Nordea Member of the Board Antra Bergmane says: “A study loan is a solution for those students who themselves or whose parents cannot at present afford to pay the tuition fee and cover daily expenses. Unfortunately, the survey shows that the future students have low interest about loan terms. By making an unconsidered choice, it may be that for a loan used during studies even several thousands of lats can be overpaid. One should not rely only on recommendations by relatives or friends or on attractive advertisements. As with any other loan, also the supply of student loans should be considered critically by taking into account such aspects as the interest rates offered by the bank, the fee for the conclusion of a contract, the contractual provisions on the possibilities to change the repayment schedule, and the penalty interest in case of delayed loan repayments. Therefore, the next task for the future students after a thorough selection of the study programme is to choose as thoroughly also the financing for the study loans granted by banks and for everyday expenses.”

Student loan offered by Nordea 

Nordea Bank offers loans for studies, everyday expenses and commencement of studies of up to LVL 8 500 or EUR 12 000. The loan includes an amount for paying the tuition fee in full, a regular amount for everyday expenditure during the studies of up to LVL 150 each month, also in summer, and a one-off amount for commencement of studies up to LVL 500.

¹ Nordea survey was carried out in July 2010. It covered 502 young people aged 17 to 20. The survey was carried out using the survey tool offered by the web page draugiem.lv.