– The fact that so many people now have to use credit cards or take out consumer loans in order to afford completely basic expenses makes me deeply concerned.
That’s what the leader of the Norwegian student organization, Maika Marie Godal Dam, says.
The trend is increasing
25 per cent of 1,002 students surveyed have used credit cards to cover expenses related to food, curriculum, rent, electricity and health services.
This is shown by a survey carried out by Sentio on behalf of the Norwegian Student Organization (NSO) and Universitas.
CREDIT DEBT: Students incur credit debt to make ends meet. Photo: Mathias Kleiveland / TV 2
Six percent answer that they have taken out consumer loans to cover the same costs, and five percent answer that they have used both credit cards and taken out consumer loans.
It was University who first mentioned the matter. According to the student newspaper, the survey shows an increase of eight percent in the use of credit cards and consumer loans among students compared to last year.
The development is not surprising for the NSO leader.
– The financial situation of the students is very stressful, and it is a development we have seen for many years. The extraordinary price development comes on top of the fact that student aid has not increased in line with the rest of society, says Godal Dam.
NOT SURPRISED: According to the head of the Norwegian Student Organisation, Maika Marie Godal Dam, students have lost purchasing power over the past 25 years. Photo: Skjalg Böhmer Vold / NSO
– It is not surprising that more and more people now have to resort to credit cards and consumer debt to get the finances going. It’s tighter than ever.
In November, the government agreed to give full-time students NOK 9,022 a year in increased study support from 2023.
Godal Dam says the increase was long-awaited, but that the sum in no way eases the financial challenges many students experience.
– According to our student budget for 2022, students lose around NOK 6,000 each month. Even with this increase, they are losing NOK 5,000 every month, says Godal Dam.
She believes that the student economy creates a greater class divide among students.
– With today’s student support, many are dependent on help from home or on working an unhealthy number of hours alongside their studies. This can result in students not having the time or resources to take care of their physical or mental health.
– In addition, it will affect who can afford to study at all, she says.
A full-time student with a job spends an average of 50 hours a week on studies and work, according to Statistics Norway.
Afraid of the consequences
Consumer economist at Nordea, Derya Incedursun, says she understands that many students see no other way out than to resort to credit cards, but she warns against the consequences.
– If you use credit to cover basic needs, you can quickly enter a vicious circle of financial challenges, says Incedursun.
– If the interest starts to accrue, and you cannot repay immediately, the credit debt will follow you for many years.
Students have always had little to worry about, according to Incedursun, but with the extraordinary rise in prices, the situation has worsened.
DISTURBING: Consumer economist at Nordea, Derya Incedursun, thinks the development is disturbing. Photo: TV 2
– Even with a part-time job alongside studies it is difficult now, unless you get good help from your parents. I would advise anyone who is struggling to be open about their own finances, even if it can feel a little embarrassing.
– What do you have to say to those students who do not feel they have any other choice but to use credit because the finances are not sufficient?
– I want to send some signals to the politicians. Although the student aid has increased somewhat, it is not enough. It should not be the case in Norway that you have to use a credit card to cover basic needs. It is disturbing, says Incedursun.
Made several moves
Ola Borten Moe, the Minister of Research and Higher Education, tells TV 2 that he understands that it can be tough for the students:
– Norwegian students, and at least those who only live on loans and grants, do not live a fat life. Nor has it ever been. It is probably the group that notices the price increase the most, because you have so little from before.
At the same time, the minister believes that several steps have been taken to help the students.
– The measures taken by the government and the Storting in the past year means that Norwegian students are largely shielded from the price increase. This is one of the very few groups in society at a time of both inflation, high interest rates and energy prices.
Research and Higher Education Minister Ola Borten Moe (SP) Photo: Frode Sunde / TV 2
Among other things, the students have received two individual amounts of electricity support, and after budget negotiations with SV, it was decided that the student support will be increased.
Borten Moe believes that in any case it is also a personal responsibility when you choose to use a credit card:
– You have to be vigilant so that the loans do not become too difficult to service. And it is also a personal responsibility for each individual not to put themselves in a situation where it is difficult to service their own debt obligations.
