Students’ clear demands for their rights to employment and income security, housing security, education and social services are therefore not made from thin air.
On the occasion of the parliamentary elections, the Student Council reaffirms its demands for the right of students to unemployment benefits on an equal footing with other working Icelanders and an improved student loan system, which is expected to undergo another comprehensive review during the coming term. In addition, the Council demands that the necessary funding for public education be secured and that public education in Iceland be competitive with public education in the Nordic countries, by reducing or abolishing registration fees at public universities in Iceland.
Systemic change is not impossible, but it requires the political will of the government. The Student Council demands that students’ issues be given a real sound basis now and in the next election term. Students deserve financial security for the future.
Previous comments, presentations, statements, surveys and other published material from the Student Council this past year is here accessible for those interested.
Nothing can go astray
The seventh round of EUROSTUDENT VII, which was first published in October 2020 and then in May 2021, shows that 72% of Icelandic students work, otherwise they would not be able to afford their studies. Compared to the Nordic countries, Icelandic students score the highest to beware of. 31% of Icelandic students are in financial difficulties and 25% believe that work affects their academic performance. Information on the position of students in the labor market is not sufficient by the government, which makes it difficult for us to assess the situation at any given time. For example, not all students are included in the Directorate of Labour’s unemployment figures because they are not on the unemployment register because they are not entitled to unemployment benefits.
The reality of students is that little can go wrong in school without affecting their financial situation, housing, mental health and/or education – all factors that go hand in hand. Study should be full-time, but circumstances allow very few students to concentrate fully on it. Failure to meet study obligations due to increased workload can lead to high levels of stress and strain. This affects academic progress, which can both affect students’ failure, e.g. conditions of rental housing or for student loans.
The fact is that financial support for people in education is scarce. The aim of the student loan system should be to provide support to students, but access to it and the terms available do not affect the entire student group. In addition, it overlaps with other schemes that students need to apply to, such as the unemployment insurance fund and the maternity leave fund.
Take the example of a single and childless student at the University of Iceland on student loans, who lives in a room with shared facilities at the Student Housing. At the beginning of the school year, the student has to pay 75 thousand ISK. in registration fees and buy four textbooks that are approx. eight thousand ISK each, who make 32 thousand ISK. The student is entitled to ISK 116,187. per month in basic subsistence from the Education Fund. With an additional loan with regard to housing, which is ISK 79,853. per month, a student can receive a subsistence equivalent to ISK 196,040. in a month. His monthly rent is ISK 99,999. You need to buy food, the typical consumption criterion of the Ministry of Social Affairs for monthly food-related expenses for one car-free adult resident of the capital is ISK 37,493. Let’s target that amount. Without including housing benefits and expenses for health, services, transport or leisure, you have to pay more than ISK 244,492. at the beginning of the school year which make ISK 48,452. in excess of the student loan. The student does not pay monthly registration fees and textbooks, so this item is not always available. However, it is possible to add to the expenses that we did not collect first, i.e. charges for health, services, transportation or leisure.
Expenditures accumulate quickly and without financial backing, students have a hard time making ends meet. Nothing can happen without putting the students’ financial situation aside.
4.4 billion in unemployment insurance fund without rights
The Student Council stands by its demand for students’ rights to unemployment benefits and considers it necessary to ensure that right in the Unemployment Insurance Act no. 54/2006. General conditions for an employee to be entitled to unemployment insurance according to Art. Article 13 of the Act is to be actively looking for work, but according to Article 14 of the Act, students are not considered to be so and are therefore generally not entitled to unemployment benefits.
Students were entitled to unemployment benefits during study breaks until 1 January 2010. With a bill to amend Act no. 54/2006, on Unemployment Insurance etc., which was submitted to the Althingi in November 2009, the amendment was proposed that students cannot be considered insured within the unemployment insurance system. The reason was that those who lose their jobs are required to be actively looking for work, and that this includes e.g. that they are prepared to take up employment anywhere in the country without special notice. The student loan system was supposed to catch students. It was therefore assumed here that students were not working people, but the fact is that the student loan system then and now significantly restricts the number of students who are forced to enter the labor market. There are then people who have no security to apply to. Throughout the coronary heart disease epidemic, the labor market was closing in on young people. The jobs that students look for are most common during their studies and in the summer, in e.g. tourism and the restaurant industry, were on standby. However, there was no reason to make the necessary changes in the legal environment.
According to the process of the bill on the parliamentary website, its approval took place on 18 December 2009. The Student Council took up the matter at that time, and together with other student movements, the council submitted a comment on the bill:
„The reason why students comment on Article 5. is that student loans only guarantee subsistence for nine months of the year, but then there are three months left where they are not guaranteed subsistence. […] It is important to know that students who do not get a job during the summer are entitled to social assistance from their municipality or student loans all year round if their right to unemployment benefits is to be abolished. If it does not pass the first paragraph. Article 76 of the Constitution on the minimum subsistence level that a certain group is without subsistence for three months of the year and it must therefore be quite clear that students have access to other resources in study permits if they are unemployed.“
The bottom line is that since the student’s entitlement to unemployment benefits was abolished in 2009, neither the gap between these systems nor the students’ financial protection has been guaranteed.
The Student Council’s unemployment benefit claim is that all students who need to apply for financial assistance, due to unemployment, have the same opportunity as other working Icelanders. According to Art. Act on Social Security Tax no. 113/1990, the state’s income from the employment insurance tax, which is paid from employees’ salaries, flows to the Unemployment Insurance Fund and the Insurance Fund for self-employed persons. Today, the fee is 1.35% of the wages of all working people, including students.
Let’s say that 70% of students at the University of Iceland work in parallel with their studies, in a 50% employment rate in winter and 100% in summer work on a minimum wage, according to SGS and SA’s wage agreement from 2010, the social security contributions of that group amount to ISK 4.4 billion from 2010. They amount to ISK 4.5 billion if we look at the end of 2021. According to EUROSTUDENT VI, students work an average of 26 hours. per week with studies that are close to 70% employment rate and therefore the numbers are actually considerably higher.
Despite this fact, students are excluded from the unemployment insurance scheme. If we were to go back to the system that was in place before 2010, working students would simply be able to claim the right they have earned by paying social security contributions from their wages. The unemployment benefits themselves would therefore be in line with how much an individual has worked in the last 36 months, just as with others who lose their jobs. The Student Council’s demand is justified, as it is about ensuring equality among working people and that students are not deprived of financial security just for the sake of studying. It is a fact that students contribute to the Unemployment Insurance Fund with their work contribution, and that in itself is reason enough to embark on changes to the unemployment insurance system.
Student Loan System a poor plaster on bleeding wounds
The role of the loan fund is to be a social equalization fund that provides study assistance and to be an opportunity for students to progress and contribute. A comprehensive review of the student loan system gave the government a golden opportunity to build a new system for the benefit of students. Instead, the Student Council believes that the processing of the bill, especially in its final stages, was hasty and that many things were lacking. The Student Education Fund, which then replaced the Icelandic Student Loan Fund in the summer of 2020, brought about good changes but was largely an inadequate support system.
In the opinion of the Student Council, the first year of a new student loan system went rather badly. Low basic subsistence and reductions such as the holiday income market are reasons why students are forced to work alongside their studies. As stated earlier, a student can receive a subsistence equivalent to ISK 196,040. per month (basic subsistence + additional loan for housing costs). In comparison, the minimum wage for a full-time job is ISK 351,000. per month and unemployment benefits, based on 100% entitlement, ISK 307,430. in a month. At the same time, the student loan is reduced if the student’s income exceeds ISK 1,410,000. in a year. 45% of the annual income that is in excess is deducted from the student loan.
Basic subsistence loans and the income threshold go hand in hand:
- Basic support should enable the borrower to support himself financially during his studies
- The income threshold is the maximum amount of income that a borrower can have before his loan is reduced
As stated earlier, a student can receive a subsistence equivalent to ISK 196,040. per month (basic subsistence + additional loan for housing costs). In comparison, the minimum wage for a full-time job is ISK 351,000. per month and unemployment benefits, based on 100% entitlement, are ISK 307,430. in a month. At the same time, the student loan is reduced if the student’s income exceeds ISK 1,410,000. in a year. 45% of the annual income that is in excess is deducted from the student loan.
This means that the single and childless student above, on subsistence loans that are enough for him and forced to work harder, will have his loans reduced. With the student loan system, as it is now, students are being offered a vicious circle that is characterized by having to work for themselves despite being on subsistence loans and then paying for it.
For this reason, the Student Council has placed much more emphasis on the need to increase the basic subsistence level so that it corresponds, at a minimum, to the typical consumption criteria of the Ministry of Social Affairs. Last year, the government was offered three opportunities to adjust its basic subsistence level.
- With the allocation rules of the Menntasjóður 2020-2021 which were approved by the Minister in July 2020, following the Menntasjóðurinn taking over from the Icelandic Student Loan Fund.
- With the allocation rules 2021-2022 which were approved by the Minister in March 2021.
- With a group of ministers who were tasked with working on proposals for an increase in the basic subsistence allowance, but resulted in a temporary increase that only reached those students who earn less than the holiday income limit = temporary “additional loans” which is not a future solution to students’ financial situation.
Another comprehensive review of the student loan system will take place before the autumn session of 2023, all things being equal. The parliamentary elections are therefore extremely important to students. The Student Council emphasizes that the review must take place in consultation with its main stakeholders, which are first and foremost the students themselves. In accordance with the Council’s comments and resolutions from the summer of 2019 and 2020, the Council reiterates the following aspects that need to be changed:
- The attitude of the management of the Education Fund as well as the government must take place. It can not be considered normal that, compared to the Nordic countries, Icelandic students should work the most with their studies and that the government views this positively. This attitude is reflected in very little reform in terms of student financial security.
- The fund’s ideal of sustainability must be part of the story. If the incentive system works, i.e. If students complete their studies on time and enter the labor market faster, this will result in tax revenue and savings in the school system amounting to ISK 1-3 billion annually, according to calculations by Summa ráðgjaf ehf for the Ministry of Education and Culture. The Student Council is of the opinion that these funds should flow back to the fund.
- The basic subsistence arrangements for maintenance loans must follow clear instructions on auditing between years. Otherwise, there is no requirement for the board of the Education Fund to take action if necessary.
- The basic subsistence level of maintenance loans must be increased so that it corresponds, at a minimum, to the typical consumption criteria of the Ministry of Social Affairs.
- Lower interest rate cap: Interest rates are no longer at a fixed 1% with the rules of the Student Education Fund, but are variable. The interest rate cap is now 4% for indexed loans and 9% for non-indexed loans. Interest rates on student loans can be expected to rise to the current higher interest rate ceiling. The Student Council requests that a ceiling be set at 1%, as was previously the case with the Icelandic Student Loan Fund, as this increase entails increased uncertainty for borrowers and worse loan terms.
- Child grant: Child grant is only available to parents who are studying and borrowing from the fund. The Student Council emphasizes that parents in education will incur increased expenses and regrets that they have to be a borrower in order to receive the said grant.
- NOTIFIED RENTAL AGREEMENTS: A notarized lease agreement guarantees rent rights to those who are entitled to it, and is therefore an option for many. However, there is no general obligation to register lease agreements and therefore it would be a mistake if the Student Education Fund intends to send borrowers to submit such an agreement. It is therefore inappropriate to claim that the reason for the requirement for notarized leases is that students should be guaranteed increased rights, but the real reason is that the Education Fund is demanding that the student have a notarized lease to be paid out the additional loan. The requirement for notarized leases is required to be dropped and is optional.
- The income connection shall be abolished as it restricts access to studies and discriminates against those who were not able to go to study earlier in life.
Purposeful and acceptable support for students is an investment in the long run and thus a benefit for society because it is what benefits to a great extent. Gylfi Þ. Gíslason, former Minister of Education, puts it best:
„It can even be said that it is doubtful whether any investment is likely to be more profitable than the one that is spent on increasing and improving the nation’s knowledge.“
A underfunded University
The government’s charter called for a major advance in education, which clearly states that a strong education system is a prerequisite for progress and education is at the heart of innovation in the future. The government set itself two goals in terms of funding for higher education. On the one hand, the funding of tertiary education will reach the OECD average for 2020 and, on the other hand, the Nordic average in 2025. The former was achieved and the funding is comparable to the average of universities within OECD countries. The latter still has three years to policy.
The University of Iceland, on the other hand, has pointed out that the university’s funding is still far behind the funding of comparable universities in the Nordic countries, and that it is important to keep pace and take targeted action so that the timeline remains. According to a resolution of the University of Iceland University Council from February 2020, the total income of universities per year student in the Nordic countries is on average 4.4 million annually, but in Iceland only 2.8 million. Students in Iceland therefore receive about 1.6 million ISK less.
- Students get 79% more in Denmark
- Students get 61% more in Norway
- Students get 61% more in Sweden
- Students get 25% more in Finland
The number of students has increased considerably in a relatively short time. In this context, the Student Council has pointed out the government’s overemphasis on getting people to study, to educate us out of the coronavirus crisis, and the lack of measures at the same time. The budget for 2021 provided for increased funding for tertiary education, which at that time was and is crucial to ensure the quality of education as well as the ability to adequately address the increase in the number of students. However, it is crucial that increased funding is not only due to the temporary increase in the number of students, but also to strengthen our education system for the future. This is a prerequisite for the university to be able to carry out its basic activities.
The education system is required to specialize in individuals to better prepare them for challenges, to acquire skills and knowledge, and to promote a sustainable future. The underfunding of the school can lead to a deterioration in the quality of teaching and a limited incentive to improve. Study aid and specialized services will be scarce as well as study facilities. The supply of studies may also deteriorate, as we saw in the school year 2017-2018 when approx. fifty courses were canceled at the school, due to the government’s austerity policy at the time. The University of Iceland is one of the leading universities in the world and our professors are also among the leading scientists in the world. In order for the university to be competitive in that environment, its infrastructure must be strengthened. Create a unique position for him so that he can be a leader in teaching and research activities. It pays off many times over in Icelandic society, promotes living standards and value creation. Although an independent entity, the University of Iceland is a state-run institution and it is the direct responsibility of the government to ensure that the financial contributions to the University are acceptable.
Three times higher registration fee than in the Nordic countries
At the beginning of last year, the Student Council sent a letter to the Minister of Education and Culture following the University Council’s meeting at its meeting on 6 February 2020, instructing the Rector to introduce an increase in the registration fee for public universities to rectors of other public universities. and the Minister of Culture. Student representatives on the University Council had paid for it, and the Student Council also considered it appropriate to state its position in this matter. The Minister of Education, Science and Culture informed the Council that the registration fee would not increase in the school year 2020-2021 and was willing to look into the fee further in a possible working group that has not materialized since, despite repeated representations by the Student Council.
It is not common practice to collect registration or tuition fees from students in public universities in the Nordic countries. The main exception is Norway, where students pay fees in the range of ISK 4,100 – 22,000, according to the national student association in Norway. Students at the University of Iceland pay ISK 75,000 per year, which is approx. three times more than in comparable public universities in Norway, or 340% more.
In the second paragraph, Article 24. of the Act on Public Universities states: “Universities may earn income in addition to contributions according to Art. Paragraph 1 with: a.) registration fees that students pay when registering for studies, up to ISK 75,000. for each student on an annual basis; levied fees according to this section shall not return to the university higher income than the total expenses of the university for student registration and services to students that are not included in the cost of teaching and research activities.”
Collection of service fees in the form of registration fees for public universities is thus subject to two conditions. On the one hand, the fees shall not yield higher income to the university than the total expenses for student registration and certain services. However, the service charged may not be considered as a cost of teaching and research activities.
In Annex B to Rules no. 244/2014 on the tariff of the University of Iceland for services to students, collection and measures of the registration fee, the cost of the registration fee, which is in violation of the second paragraph, Article 24, is included. of the Act on Public Universities, because today the registration fees go to the following cost items:
- 1. tl. Registration of students for courses, exams and under that item are the fees of the student register and service desk as well as other fees (calculated) 25% of the operation of the division / department office
- 4 tl. Organization of teaching and examinations and under that item are booked fees, examination supervision
- 6. tl. Office of the Department of Education and fees calculated under that item (20% of the operation of the Office of the Department of Education)
- 9. tl. Access to computers, printers, etc. where book fees, operation of computer labs and other fees are calculated (50%) of alm. Reiknistofnun’s operations are specified
- 10. tl. where Facilities and Management are specified and fees calculated from items 1.-9.
The Student Council doubts that the cost items in question include services in addition to student registration, such as examinations as part of the assessment and operation of the teaching department, library and computer lab. These are all normal aspects of teaching, as well as research activities, which is a statutory service that the University of Iceland must provide. It therefore falls under the cost of teaching and research activities that the registration fee may not cover, cf. Paragraph 2 Article 24 Act on Public Universities. The council doubts that a strict legal separation rule on the collection of fees allows for such a broad interpretation of what is considered to be a cost in addition to the school’s statutory role in teaching and research activities. When enumeration for example is stated in law, the government certainly has scope to assess what falls under it at any given time. Nevertheless, it must be borne in mind that this is a tariff that is burdensome for the person who pays the fee and therefore a restrictive interpretation should be used.
It should also be mentioned that the registration fee does not, by its nature, have to cover all the costs that are covered by it. The fact is that the law stipulates that the fee shall be a maximum of ISK 75,000, which means that the fee may be lower.
In the spring of 2020, the Student Council requested that the registration fee be abolished for the school year 2020-2021, as the students’ financial situation had taken a hit due to the increased contraction in the labor market due to the coronavirus. The Student Council is of the opinion that the registration fee is an increased levy on students who already work extensively along their studies. The registration fee thus restricts access to higher education and thereby reduces everyone’s equal rights to study.
It is high time the government kept its promise of secure funding for higher education and made public higher education in Iceland competitive public higher education in the Nordic countries, where registration fees are much lower. The University of Iceland is a public institution and as such it is funded by the state, it should not be the responsibility of students to contribute to the state. The underfunding of the school in any form is a significant obstacle to education.
Students are worth the investment
The Student Council hopes that successful consultation can take place in the next election period and emphasizes that it is a matter of equality that students’ voices are given weight in all decision-making that concerns them.
Only with the will of the government and the involvement of students can equal and unhindered access to education be promoted. If this is done in a high-quality and safe manner, living standards will be improved and the nation’s value creation increased. The legal environment needs to be changed in order to promote students’ financial security. This includes the Student Council’s demand that students be given access to the Unemployment Insurance Fund again. While that right does not exist, there is an environment for students where nothing can go wrong. This needs to change.
Students should be able to study without having to scratch through financial difficulties and worries. In this context, the Student Council considers that the student loan system does not fulfill its role as a social equalization fund and considers the Student Education Fund to be in its current form a poor patch for bleeding wounds. In order to remedy this situation, the Student Council decides that the first step is a change in the government’s attitude towards the student loan system. It can not be considered normal that Icelandic students have to work as much with their studies as they do in real life. The Student Council demands that the arrangement of the basic subsistence of subsistence loans follow clear instructions on auditing between years. Immediately, the basic subsistence must be increased so that it corresponds, at a minimum, to the typical consumption criteria of the Ministry of Social Affairs. If this is not done, borrowers will continue to fall into a vicious circle of too low maintenance loans and increased financial stability. With the onerous costs involved in studying at the University of Iceland, the situation will also worsen.
At the University of Iceland, registration fees are three times higher than at our neighboring universities in the Nordic countries. This difference can be traced to the university’s underfunding, which must be corrected with improved funding. In order for the university to be competitive and a leader in teaching and research activities, its infrastructure must be strengthened. As the University of Iceland is a state-run institution, it is the responsibility of the government to ensure that the financial contributions to the University are acceptable.
These emphases and requirements of the Student Council do not exist in a vacuum, but they are integrated and all play a part in strengthening both the studies, environment and living conditions of students at the University of Iceland. If done correctly and if the government’s will is present with the involvement of students, the Student Council concludes that a journey can begin on a real major push for job and income security, education and social services.