http://www.chronicle.com/daily/2000/11/2000112906n.htm
Hungary will start a student-loan program in September as part of a $250-million World Bank effort to reform the country's higher-education system.
Government officials hope the loan program will eventually lead to higher enrollments. Currently, about 30 percent of Hungary's high-school graduates attend universities. Even though university education is free for most students, education officials say the costof such necessities as books, clothes, and rent keep qualified students from enrolling. They hope that within five years, 60 percent of high-school graduates will go to college.
There are 260,000 students in Hungarian universities.
"It is a problem if young, bright Hungarians can't go to university because of their family finances," said Gyula Gilly, deputy director of the Higher Education Reform Program at the Ministry of Education. "This type of loan scheme will assist students who otherwise wouldn't submit university applications."
All students, regardless of their parents' finances, will be eligible for an annual loan of $675. Repayment schedules will last 5 to 30 years, depending on the individual's salary, and the interest will be pegged to the rate of inflation. Loans will be guaranteed by the government.
The Education Ministry will borrow funds in the open market annually to finance the program and is currently establishing a Student Loan Company to dispense the money.
The World Bank and Hungary have been working on revamping the university system for several years. The program is a year behind schedule because in 1998 a new center-right government abolished tuition, which had been put into place in 1995. Charging tuition was a key facet of the World Bank plan to modernize Hungarian universities.
Other aspects of the program include establishing a credit system, creating a student-loan program, and consolidating the number of colleges in the nation.
In the past two years, the loan program was revived, and the number of universities has dropped to 30 from 54. Reinstating tuition is not on the immediate agenda.
"Our first goal is to increase access," said Mr. Gilly. "It will probably take three to four years to arrive at a point where the loan program will be established in people's minds. That has to happen first" before tuition can be reinstated.