Education and Science, Financial Services, Latvia

In October, when the government supported a new system of student and study loans, the government said that the new system would allow 30% of outstanding loan amount to be extinguished for parents of newborn babies or if young parents adopt a child.

Outstanding study and student loan amounts would also be written off in the event of the debtor's death or disability. At the same time, the government said that writing off study and student loans for graduates' work at state and municipal institutions would be decided later as part of the work on the 2020 state budget.

Today, the government supported the Education and Science Ministry's amendments to several Cabinet regulations on granting, repaying and writing off study and student loans. Among other things, they foresee that, from the beginning of this year, outstanding study and student loan amounts will no longer be extinguished for work in certain areas and positions determined by the Cabinet of Ministers.

Until now, teachers, kindergarten teachers, social workers, cultural workers, medical workers, employees in public administration, prosecutor's office and court could hope that part of their student or study loans would be extinguished.

According to Suplinska, once the system is working and state institutions see that there have been many borrowers in, for instance, pedagogy or medicine, and these particular sectors are in dire need of employees, the public institutions concerned will be able to propose that some of the student and study loans be repaid from the state budget for those working in these industries.

It remains to be seen whether the new system could result in a decrease in enrolments at pedagogical institutions, for example, said Suplinska. A new one-year training program for future teachers provides for higher scholarships, while those enrolled in four-year courses are issued larger student and study loans to fully cover their living expenses, she explained.

Previously the Education and Science Ministry said that the new system of study and student loans would encourage credit institutions to issue the loans by simplifying administrative procedures and increasing the availability of study and student loans.