Swedish Students in Debt, But Gain Independence from Parents

Even though university students owe nothing towards their education, they still end up with large amounts of debt. writes Matt Phillips of The Atlantic, as Swedish students accrue an average of $19,000 in debt by graduation.

Free education is no longer a luxury many European countries can afford. Since 1995 over half of OECD countries have rewritten college tuition polices at public institutions, with many of them adding new fees and raising existing charges.

Students in Germany and the UK have far lower debts than in Sweden. And 85% of Swedish students graduate with debt, versus only 50% in the US. Worst of all, new Swedish graduates have the highest debt-to-income ratios of any group of students in the developed world (according to estimates of what they're expected to earn once they get out of school)–somewhere in the neighborhood of 80%. The US, where we're constantly being told that student debt is hitting crisis proportions, the average is more like 60%.

The question is, with no tuition to pay, why are Swedish students still buried in debt?

The cost of living is high in Sweden. Students pay extremely high prices for rent, food and luxuries like alcohol. But since students in other European cities also pay these costs, it doesn't answer why Swedish students' debt is so high. The answer: university students are expected to be financially independent, unlike other college student who rely heavily on their parents.

Living at home to cut costs is rarely an option since the population is geographically spread out, but many students choose to move out even if they can live at home while they attend university. Swedes have an independent streak, and leave their parents' homes sooner than almost all of their southern neighbors.

One study found that just 2% of Swedish men lived with their parents after the age of 30. In Spain, a quarter of 30-year-old men still are shacking up with mom and dad; in Italy it was around 32%.

In order for students to cover all of these costs, practically 100% of students accept student aid loans and grants.

"[L]evels of student support are based on students' own income, rather than that of their parents," wrote analysts in a white paper on the system. Compare that to countries like Germany, where any aid from the state agency that doles it out, known as BAföG, is premised on parental income. In the US it's the same deal. In Sweden, the entire system is aimed at severing the financial link between parents and young adults.

Swedish students can handle making payments since the monthly payment is only 3.8% of the estimated monthly income of new graduates. The system of student debt is manageable and allows students to begin their lives separate from their parents.

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