Russia to pilot loans scheme

October 20, 2006

The Russian Government has approved a pilot scheme to provide training credits that could pave the way for a system of privately funded, state-backed student loans, writes Nick Holdsworth, in Moscow.

The scheme, which was drawn up by the Education Secretary, Andrei Fursenko, after consultation with educational think-tanks, will initially be limited to 7,500 credits and loans over the period 2007-10.

Eligible students will be able to apply for training credits, which can be used to pay for courses, and for maintenance loans.

Training credits will be capped at about 125,000 roubles (£2,500) a year for undergraduates. Students studying for further degrees are limited to half that sum.

Maintenance loans of up to 4,500 roubles a month - based on average Russian earnings - will be offered at just below commercial interest rates, meaning students on the scheme would be charged about 10 per cent.

Under the scheme, there will be extended loan repayment terms of up to ten years and write-offs for students who work for a period in socially important but low-paid state jobs such as teaching or medicine.

Mr Fursenko's cautious approach reflects the political sensitivity of introducing loans in Russia, where free higher education has long been sacrosanct despite a recent increase in the number of fee-paying students at private and state institutions.

Widening the scheme would be subject to parliamentary approval after 2010, an Education Ministry spokesman said.

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