ERIC ED532258: Loans for Vocational Education and Training in Europe. Research Paper. Number 20

2012·2 MB·English

by  ERIC

European Centre for the Development

of Vocational Training

RESEARCH PAPER

No 20

Loans for vocational
education and training
in Europe

Luxembourg:
Publications Office of the European Union, 2012

Loans for vocational
education and training
in Europe

Luxembourg: Publications Office of the European Union, 2012
A great deal of additional information on the European Union is available on the
Internet.
It can be accessed through the Europa server (http://europa.eu).
Cataloguing data can be found at the end of this publication.
Luxembourg: Publications Office of the European Union, 2011

ISBN 978-92-896-0917-3
ISSN 1831-5860
doi: 10.2801/79064

© European Centre for the Development of Vocational Training (Cedefop), 2012
All rights reserved.
The European Centre for the Development
of Vocational Training (Cedefop) is the European Union’s
reference centre for vocational education and training.
We provide information on and analyses of vocational education and
training systems, policies, research and practice.
Cedefop was established in 1975
by Council Regulation (EEC) No 337/75.

Europe 123, 570 01 Thessaloniki (Pylea), GREECE
PO Box 22427, 551 02 Thessaloniki, GREECE
Tel. [phone], Fax [phone]
E-mail: [email protected]
www.cedefop.europa.eu

Christian F. Lettmayr, Acting Director
Hermann Nehls, Chair of the Governing Board

Foreword

Investing in human capital is crucial to achieving Europe’s goal of smart, inclusive
and sustainable growth. The recent crisis strengthened the need to equip people
with the right skills to improve their labour market prospects.
The Europe 2020 strategy set the target of at least 40% of 30-34 year-olds
completing third level education. The new European strategic framework for
cooperation in education and training (ET 2020) foresees that at least 15% EU
average of adults aged 25-64 should be participating in lifelong learning by 2020.
However, the challenge of reaching these ambitious objectives carries
important financial implications. Meeting higher demand for (vocational)
education and training will require higher financial resources.
Severe public budget constraints, aggravated by the recession, demand
greater shared financial responsibility among all stakeholders, as reflected in the
Bruges communiqué on enhanced European cooperation in vocational education
and training (2010).
However, cost has been identified as the main obstacle ― after time
constraints ― preventing adults from participation in education and training (adult
education survey 2007). There is a need to apply the right tools, allowing the
raising of private investment and participation in learning, and address, at the
same time, the problem of too high a financial burden (liquidity constraints) for
individuals, in particular those with low income.
Loans that allow individuals to borrow financial resources (on favourable
conditions) from their future income and invest in education and training can be a
viable means to respond to these concerns.
This report reviews the use of loans for learning in 33 European countries
and analyses the schemes in eight selected Member States: France, Hungary,
the Netherlands, Austria, Poland, Finland, Sweden and the UK. The analysis
shows that loan schemes vary considerably across Europe in terms of types and
levels of learning covered, conditions of access, repayment and governance.
Some loans aim to increase participation in learning in general, while others are
designed to promote equity. The report attempts to assess the selected loans
and discusses their strengths and weaknesses and determinants of performance,
while considering if a given scheme operates on a large scale or targets niche
groups. The evaluation results provide a basis for identifying ‘good practice
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Loans for vocational education and training in Europe
principles for designing and implementing loans. Policy recommendations are
formulated based on these findings.
I trust that this report will contribute to mutual policy learning and enrich the
evidence base for designing fit-for-purpose financing policies.

Christian F. Lettmayr
Acting Director of Cedefop
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Loans for vocational education and training in Europe
Acknowledgements

This publication is a result of a team effort with contributions from
Patrycja Lipińska, Cedefop’s project manager who coordinated work,
supervised and edited the publication, and the team of the Public
Policy Management Institute — Edina Berlinger, Rimantas Dumčius,
Simonas Gaušas, András Nemeslaki, Donatas Pocius and Daiva
Repečkaitė — who carried out the research and produced the
comparative analysis this report is based on.
Special thanks go to Łukasz Arendt, Pierre Courtioux, Mick
Fletcher, Nicholas Fox, Ben Jongbloed, David Marwan, Jenni Mäkelä,
Carl-Johan Stolt, Matyi Tegzess, Ian McLaren Thomson, Grzegorz
Winiarz and other national experts, who provided detailed country-
specific information.
Thanks are also due to Cedefop’s colleagues Pascaline Descy
and Giovanni Russo for their support in reviewing the report and
valuable suggestions for improvements.
Cedefop would also like to thank Peter Szovics who was
involved in the project during his contract at Cedefop.
The report benefited from the discussion during Cedefop’s
validation workshop ‘The role of loans in financing vocational
education and training’, held on 4 October 2010 in Thessaloniki, and
attended by experts from academia, financial institutions (including
the European Investment Bank) and governments.

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Loans for vocational education and training in Europe
Table of contents

Foreword ............................................................................................................. 1
Acknowledgements ............................................................................................. 3
Table of contents ................................................................................................. 4
List of tables, figures and boxes .......................................................................... 8
Executive summary ........................................................................................... 11
What type of education loan schemes exist in Europe? How do they
operate? ............................................................................................... 11
Which type of loan scheme works better?... ................................................... 12
…Under what circumstances and for whom? ................................................. 13
SWOT analysis of loan schemes ................................................................... 14
Recommendations for policy and practice...................................................... 15
1. Introduction ................................................................................................... 17
1.1. Study rationale...................................................................................... 17
1.1.1. Importance of and rising demand for investment in VET ........... 17
1.1.2. Limited public resources ............................................................ 17
1.1.3. Need for raising private VET investment ................................... 17
1.2. Rationale of VET loans ......................................................................... 18
1.2.1. Definition of loans ...................................................................... 18
1.2.2. Arguments for State intervention ............................................... 18
1.2.3. Importance of national context .................................................. 19
1.3. Main report objective, subject and structure .......................................... 20
2. Design characteristics of VET loan schemes in Europe ................................ 22
2.1. Types and ISCED levels of loan schemes ............................................ 22
2.2. Objectives ............................................................................................. 28
2.3. Public/private classification ................................................................... 28
2.4. Duration of implementation ................................................................... 31
2.5. Level of operation ................................................................................. 34
2.6. Access conditions ................................................................................. 35
2.6.1. Eligibility and risk assessment ................................................... 35
2.6.2. Preferential treatment ................................................................ 42
2.6.3. Limits to the loan size and the period when it can be used ........ 44
2.6.4. Loan portability .......................................................................... 47
2.6.5. Other access conditions ............................................................ 51
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