Hungary & student loans

Here is a short item on recent developments with tuition fees and student loans in Hungary (University World News).

Emigration is one potential problem for all income contingent repayment loans. For instance, the UK student loan scheme is driven through HMRC – graduates going abroad fall out of the automatic deduction of repayments through payroll and therefore an alternative method for debt collection is needed.

Hungary has decided to limit the ability of graduates to leave the country:

Most new entrants to Hungarian higher education institutions will have to pay fees of between HUF50,000 and HUF100,000 (US$232 to US$464) per semester from next year.

Students will also have to sign a contract with the government under the student loan scheme, Diakhitel 2.0, pledging to stay and work in Hungary for at least twice as long as their studies lasted. If they leave Hungary, they will have to pay back outstanding tuition fees. This clause will apply for 20 years after graduation.

Contrast this with New Zealand where terms of repayment for existing borrowers were made less generous to mitigate the problem of graduate emigration.

Update:

The relevant repayment threshold for those embarking courses in 2012 using student loans is £21000. If you do emigrate, that threshold varies depending on the country you base yourself in. The relevant table can be found here. (Thanks to David Malcolm at NUS for pointing this out to me).