The Erasmus+ Master Loans Guarantee scheme that launched end of 2015, is expanding further. This time round the scheme not only sees two new banks singing up for the guarantee, but also a first higher education institution joins in, with the University of Luxembourg taking initiative in a pilot, to offer student support in form of deferred payments for studies and housing.

Respectively, the new banks now signed up are - FutureFinance from Ireland, providing loans for in-and outgoing students of the UK, and Finansbank from Turkey, that support solely outgoing students. The Université du Luxembourg signing a guarantee agreement with the European Investment Fund (EIF) to launch an Erasmus+ pilot scheme to support postgraduates, opens a new chapter in the loan guarantee scheme. Up to EUR 5 million will be available to support around 300 incoming master students from all other 32 Erasmus+ programme countries, to take advantage of deferring payments for both learning and housing expenses. Students are expected to repay loans two years after graduation and the Erasmus+ programme will share part of the non-pay-back risk with the university.

The European Commission has also conducted survey among the first 85 beneficiaries to understand first impacts of the loans. With a response-rate of 52%, results at first glance are positive, although the rather small sample size and that respondents are limited to those benefitting in the context of Spain’s Microbank, leaves room for cautious interpretation of results. Findings include:

• Without the loan guarantee 70% of respondents would not have been able to study for their Master abroad
• Half of the students were the first to pursue higher education in their families and many reported their families had 'some difficulty in making ends meet'.
• 70% of respondents were moderately to very satisfied (16% dissatisfied), with repayment conditions and approval procedures that lasted 1-2 weeks on average rated positively
• A desire to borrow a higher amount was reflected by 55% of respondents, and 45% were satisfied with the funding level. This may indicate the balance on ceilings is reasonably well struck in the scheme.

In total over 150 million EURO is available now in loans for students from the 33 Erasmus+ Programme Countries.  A first university joining in is an important new dimension to the scheme and the European Commission is keen for more institutions or university networks to commit to such direct 'material support', and simultaneously benefit from the EU guarantee against student default on repayment. The two new banks, following first adopter Spain and France launching access last summer, slowly bring closer the target of around 25 banks committing to the guarantee scheme by 2020, and to increase coverage for greater numbers of nationally-diverse students to benefit from non-discriminatory and affordable loans.

Erasmus+ - Press release