Norway leans in further to student debt forgiveness initiatives

Norway is leaning in further to a student debt forgiveness scheme aimed at encouraging graduates to live in less populated areas of the country.

From this month, employed graduates living in Norway’s least central zones can have NKr25,000 (£1,800) of their student debt erased per year, with the ability to continue until their debt is paid off in its entirety. Average total debt for students who graduated in 2023 was NKr427,000.

“If we are to develop the whole of Norway further, we need a value-creating business sector and good welfare services. We want to avoid districts being emptied of people and expertise, which is important for the country’s preparedness,” said Oddmund Hoel, the higher education minister.

Hoel said the scheme could save graduates “a lot of money”, adding: “From experience, we know that such measures work.”

The new scheme also modifies an existing debt forgiveness initiative targeting those living in the northernmost regions of Finnmark and Nord-Troms. Graduates living here could formerly have NKr30,000 in student debt written off each year; that total has now increased to NKr60,000.

Elsewhere, the government has employed student debt forgiveness to target undersubscribed professions. Several debt cancellation options exist for teachers, including particular schemes for teachers specialising in the Sami or Kven languages, natural sciences or foreign languages.

Bjørn Stensaker, vice-rector for education at the University of Oslo, said decentralisation was one “of the key political themes in Norway, given the geography of the country”. Summarising the government’s concern, he said, “How can people living in remote areas have access to the same kind of public services as those living in urban areas?”

“In many remote municipalities, they have lost part of the younger population,” he continued. “And of course, with the new geopolitical situation [concerning neighbouring Russia], it is also of importance, one could argue, to keep population in the areas which are more sparsely populated.”

Stensaker described the loan forgiveness schemes as “a targeted approach”, explaining: “I don’t think they have a dramatic impact, but for people with high amounts of loans, I think they could have an impact.” For students from less affluent backgrounds, he added, the possibility of debt forgiveness could prove “an important factor” in their post-graduation plans.

Lars-Erik Borge, professor of economics at the Norwegian University of Science and Technology, suggested the schemes may not encourage long-term population changes in remote areas. “If you want to attract people permanently, there are some problems,” he said. “People may stay there while their debt is high, then move back to more central areas.”

Debt forgiveness schemes for teaching graduates, he said, could have the problematic consequence of turning “small schools in rural areas” into “training institutes” for newly qualified teachers, who may move to remote regions to reduce their debt but stay “for quite a short time”.

emily.dixon@timeshighereducation.com