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Why Danish students are paid to go to college

The Danish government is paying its students to go to college. (Photo: Syddansk Universitet)

When 23-year-old Danish engineering student Louis Moe Christoffersen arrived in Baltimore in late January for an exchange semester, he immediately noticed a difference: Everything was so much more expensive at U.S. colleges than at home.

Since 1985, U.S. college costs have surged by about 500 percent, tuition fees keep rising, and even President Obama's plan to make community colleges free has faced harsh criticism at home. Whereas U.S. politicians argue about how much students should pay for higher education, the opposite is the case in Denmark: There, the government is even paying its students to go to college.

"Danish citizens don't have to pay any tuition fees. Housing is really cheap, as well," Christoffersen said, before adding: "In fact, we're all being paid by our government if we're enrolled in a university. It's like somebody is paying you a salary for going to your college classes."

Most Danish graduate without significant student debt

Every Danish student receives about $900 (5,839 Danish krones) per month under a scheme known as SU (Statens Uddannelsesstøtte). The generous financial support does not have to be paid back even if students drop out, and the only major requirement for students to receive the full amount is that they do not live with their parents. Students receive the free funding for a maximum of six years, starting at the age of 18. Those who are particularly successful are eligible to receive additional payments.

"Some Danish think that we spend the money we receive in bars and clubs, but most students understand what is at stake: The scheme's existence is crucial to enable an excellent education for everybody, no matter how much their parents make," said Danish student Astrid Winther Fischer, who studies at Denmark's Technical University to the north of Copenhagen. Various companies offer special student discounts for cinemas, buses, trains or museums, Christoffersen added.

Other European countries, such as Germany, have similar, but privatized schemes. For instance, many companies offer dual degree programs that involve practical training at work as well as semesters spent in a college environment. Those students are paid their salary by their companies even when they are studying. In doing so, companies hope to entice promising talents early on.

Many Danes, however, consider access to education without financial obstacles a governmental responsibility that should not be left in the hands of private universities or companies.

"The aim of the support scheme is to ensure that it is not the social and economic standing of potential students but abilities and interests that decides about educational success," Mads Hammer Larsen, a press spokesperson for the Danish Ministry of Education, told The Washington Post.

There are some indications that the idea might work: Danish universities have one of the highest graduation rates among all Organization for Economic Cooperation and Development (OECD) member countries and its citizens are practically free of student debt.

However, to finance this system and other expenses, the Scandinavian country has one of the world's highest tax rates.

Could free higher education hurt the economy?

Opponents say that the for-free culture at Danish universities encourages students to earn degrees that do not meet the demand of the country's labor market.

However, Denmark's youth unemployment rate is currently at 11 percent -- one of the lowest in Europe and still lower than the United States, which has a youth unemployment rate of more than 12 percent.

Nevertheless, opponents argue that particularly industries that are economically important face a shortage of suitable graduates. Various engineering enterprises have repeatedly voiced discontent with the Danish higher education system. If students were forced to pay, they say, this would incentivize freshmen to choose more scientific and technical degrees which guarantee higher average incomes after graduation.

Other companies have asked for more governmental efforts to focus on universities and courses that create jobs and growth. Michael Almer, vice president for human resources at Novozymes, a leading Danish biotechnology company, told The Washington Post: "A lack of talents would limit the growth of both the economy and particular companies. Our government needs to be smart about which types of education are funded -- we need more engineering and science students." Almer also acknowledged that companies themselves had to do more to portray themselves as attractive employers.

Recent studies, however, have raised questions about the long-term validity of such arguments. A widely cited report by OECD from last December found that inequality and a lack of access to education had held back economic growth in most developed countries from 1990 to 2010.

Denmark, though, had faced nearly no negative economic consequences, contrary to nearly all other examined countries.

Related to this topic: 

7 countries where Americans can study at universities, in English, for free (or almost free)

Denmark's social welfare system -- explained (by Martin Flink,