Hungarians consult the LSE over grants and loans reform

July 16, 1999

Hungarian education policy-makers are examining options for a loan and grant system as part of the process of implementing the country's higher education reform plans.

When the Young Democrats party (Fidesz) entered office in Hungary in 1998, they inherited a $150 million loan from the World Bank for a complete overhaul of the country's higher education.

However, the suspension of tuition fees for all students, which was one of Fidesz's main election pledges, meant that Hungary no longer complied with the bank's technical requirements and continuation of the programme came under threat.

In an appeal to Washington the new government argued that the introduction in 1996 of relatively high tuition fees without simultaneously providing less well-off students access to funds had been socially unacceptable and was jeopardising the country's efforts to bring participation up to a Western European level.

The bank accepted a temporary suspension against a Hungarian commitment to work hard on the introduction of a sustainable system of student loans and grants.

The timetable for establishing the structure is tight. A detailed plan must be ready by the end of this year and a pilot programme should be underway next summer. Introduction of the new system is scheduled for 2002.

But that does not seem to worry Gyula Gilly, deputy director of higher education reform at the ministry of education. "Analysis paralyses, and we don't want to walk into that trap - the situation is urgent," he said.

Eva Keresztes, programme manager at the office for higher education integration programmes, said: "There seems to be wide support for a means-tested system with repayment through tax after graduation."

The two were members of a delegation of officials and education representatives which last week visited the London School of Economics for a tailor-made two-day introduction to the subject.

Asked why he thought the Hungarians had sought advice in the UK, Iain Crawford, research fellow at the LSE, said: "The World Bank exports American-style systems and Hungarians are profoundly scared of American social policy. Another reason for the Hungarians to stay within Europe is the prospect of entry into the European Union, which influences all policy decision-making in the country."

Mr Gilly said that they had not come to the UK, but specifically to the LSE. "The LSE has an excellent track-record in this field and the programme they put together for us proved that they are qualified partners."

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