A Necessary Investment for the Future of Students

The National Union of Icelandic Students (LÍS) is running a campaign as a direct response to a bill being introduced to Parliament for a new student loan fund (Icelandic: Frumvarp um Menntasjóð námsmanna). As the current loan system is outdated and does not serve its purpose, a new and improved system is long overdue. Education is instrumental for employment, stimulates social innovation and encourages critical thinking. Access to Higher Education is thus necessary for all social groups, regardless of background and circumstances. Although the proposal for a new student loan fund is undeniably a step in the right direction, it is important to keep in mind that there is still a lot of work to be done so that students conditions are adequately addressed. If the bill is accepted as it stands, loan terms will undergo major changes compared to the current system. Interest rates would vary in accordance with market rates, which would abolish today’s interest-rate ceiling. The current student loan fund’s interest rates are steady at 1% and legally cannot go higher than 3% — thanks to the aforementioned interest-rate ceiling.

Parliament now has an opportunity to invest in education by following students’ demand for keeping a ceiling on interest rates. The goal of the current government is to drastically improve the educational terms in Iceland. However, the removal of the current interest-rate ceiling contradicts this goal; as it will affect the already unstable economic situation of students. Each Icelandic krona the government invests in the Higher Education sector returns its value eightfold. So, if the role of the fund is to provide equal opportunities for education, then it must include support in the form of interest rate protection to lessen the financial burden of students. This is especially important with regards to the turbulent economy of Iceland and it is essential for the government to acknowledge and recognize that fact.