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The state grants preferential zero interest loans for personal development investments. Students argue they might lead to higher tuition fees

The state grants preferential zero interest loans for personal development investments. Students argue they might lead to higher tuition fees

After deputy PM Viorel Stefan had announced the Government would grant preferential zero interest loans to people who want to invest in personal development, to cover education, health or culture expenses, PM Viorica Dancila came up with new explanations.

The credits can be accessed by youngsters aged from 16 to 26, but also target people up to 55 years old.

The premier has stated in Marasesti on Wednesday that those who want to benefit of these preferential loans, which are guaranteed by the state, must take some courses.

The money comes from the banks. The state pays the 6 percent interest. The state will guarantee 80%, the youngster aged from 16 to 26 will guarantee the rest of 20% for a credit of RON 40,000, and people aged from 26 to 55 for a credit of RON 35,000. What is conditioning this loan is that the person must take the courses of a faculty or to take some re-conversion and refresher courses… I hope as many youngsters as possible will benefit of this programme, for the money can be used in education, to pay classes in college, for teaching aids, can be used in culture, in sports, so in variety of fields,” the premier explained, announcing the topic will be tackled in a government sitting.

Asked if the reimbursement of the money by the people who are not employed will be made after hiring, the PM said: „If that person is not employed, he or she needs a co-debtor for the 20% guarantee.”

Dancila revealed the total value of the programme mounts to about RON 1 billion.

Deputy PM Viorel Stefan had previously announced this programme on Tuesday night.

If youngsters aged from 16 to 26  are able to access a loan of RON 40,000, the people aged from  27 to 55 will are entitled to loans worth  RON 35,000. However, the sum could reach the value of RON 60,000 if those who access the loans are taking up employment during the programme.

The money could be used to pay courses, kindergarten fees, to buy books or PCs or to pay rent, but also to pay fitness passes, or part of the expenses need to buy or revamp a house.

The deputy PM said there will be 8 million beneficiaries, but no information is available about the negotiations with the bank or when the programme might kick off.

All bank commissions and interests are borne by the state through the budget of the National Commission of Strategy and Prognosis, providing that the payment of maturity of the loan rates. The duration of the credit is ten years, the purpose is to give a grace period to the beneficiary to finish his/her education and to be able to reimburse the credit after he or she is getting employed (…) There will be no direct transfer of money to the beneficiary’s bank account, but the beneficiary will only be able to settle invoices or direct payments based on proforma invoice presented to the financing bank,” Stefan said.

Students or youngsters will be able to pay their education with these loans (including faculty degrees, master or PhD degrees, MBAs) to buy books, magazines, to pay fees to attend scientific events or contests in Romania, transport fee to attend such events in Romania and abroad, to buy laptops, PCs, software or printers.

They will also b able to buy cultural passes for cinema, theatres, opera houses, libraries or museums, to cover for the costs of medicines, medical tests, dentistry services or surgeries.

Students ask Gov’t for preliminary consultation, argue the programme might lead to higher tuition fees

On the other hand, the representatives of the students and pupils were not quite willing to embrace the proposed programme, arguing it might lead to less investments in the education and to higher tuition fees. The students’ organizations ask Government for an  emergency meeting on this topic, saying  a preliminary consultation is needed on the proposal.

„The legitimate representatives of the students, pupils and youngster in Romania, are urgently asking for a meeting with the Romanian Government regarding the programme< Invest in you>. We voice our surprise and disappointment that such a programme, with a significant impact on the above-mentioned social categories, might be proposed through emergency ordinance without a preliminary wide consultation,” says a press release issued by the National Pupils Council, the National Alliance of the Student Organizations in Romania and by the Youngsters Council in Romania.

They argue that implementation of such a programme might prompt a decrease of the investments in education and an increase of the tuition fees, as it happened in other countries where such actions had been enforced.

About Alina Grigoras Butu