Denmark may be known as one of the countries in the world where student conditions are best, with free education and a monthly grant of DKK5,662 per month for students who have left home.

Nonetheless, one student has managed to amass a student grant debt of DKK650,000 (EUR88,000), according to official figures from the National Administration, which calls in student debts.

Although this may be a record, student debts in the hundreds of thousands are not rare.

The figures show that 18,017 graduates and under-graduates have debts of more than DKK200,000 (EUR27,000), with 8,104 of them owing the state over DKK250,000 (EUR33,500).

It takes an academic with debts to the state of more than DKK250,000 over 10 years to repay the debt if he or she pays DKK2,000 (EUR268) per month.

And the problem of students with mushrooming debts is getting worse. Over the past decade, the number of graduates with debts of over DKK250,000 has increased five-fold, with 5,889 of them in the category – compared to 2003 when the number was 1,217.

At the same time, the Grants Council (SU-rådet) is increasingly concerned at the number of undergraduates with major debts.

“We have been discussing what to do with this group of young people. We don’t feel that debt advice is something that the educational institutions should have to deal with, but we will be discussing the issue with the minister,” says Grants Council Chairman Per Christian Andersen.

Undergraduates, however, are not the only ones with the problem – 2011 figures show that some 70 per cent of those with grant debts of over DKK250,000 are graduates.

Students are able to ratchet up such heavy debts because they are able to borrow a monthly grant loan of DKK2,897 (EUR389) as well as taking out a so-called ‘final loan’ of DKK7,422 (EUR996) per month for 12 months for those who do not have further funds in their basic grant.

“We borrow so much because we don’t have any money. We need money for basic needs such as food and transport,” says Danish Students Council Chairman Torben Holm.

The problem is compounded by the difficult situation on the labour market, which has meant that students are having difficulty in finding student jobs, and graduates who have problems finding jobs find it difficult to repay loans. Debts increase considerably as a result of interest.

Asked whether the problem is that student living standards are too high, Holm says; “Ridiculous. It’s a question of being able to eat.”

The Consumer Council Debt Advisory Bureau has also seen an increase in the number of students seeking advice on how to deal with the problem. In some cases, apart from their student debts, they also have other types of loan.

“This all means that they start their adult life with problems and are unable to do as others do. For example it is difficult for them to borrow to buy a house and their finances are particularly tight when they have children,” says Project Leader Annette Mathiasen.

She says that students have difficulty in getting debt relief as they are seen as having many years ahead of them in which to repay their debts, adding that the problem is that some young people feel pressurised into spending.

“If you want to be part of the group, you also have to take part in parties and consume more. That costs money. There are also probably students whose parents have not taught them enough about private finances,” she says.

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