Thursday, August 3, 2000

 

Russia's Largest Bank Offers the Country's First Student Loans

 

The Chronicle of Higher Education, Thursday, August 3, 2000

 

 

By BURTON BOLLAG

 

Student loans have finally arrived in Russia. Sberbank, the country's largest bank, has announced that it intends to start offering loans to help students pay tuition, which is increasingly becoming part of Russia's higher-education landscape.

 

Andrei Kazmin, head of Sberbank, said at a news conference that the bank had earmarked $53.8 million for the loans, which he said would cover up to 70 percent of students' education costs. The bank said students could immediately start applying for loans for the coming fall term at its branches across the vast country.

 

Acting Education Minister Vasily Zhuravsky welcomed the low-interest loan program, saying it would save students from large debts. "We tried to do this but there was no money in the budget," Mr. Zhuravsky said. "Next year, about 1.1 million people will be paying for their education. Many will use the credits." There are roughly 4 million college students in Russia.

 

Education reformers, both inside Russia and from institutions like the World Bank, have long argued that a system of loans or grants was urgently needed to keep the universities from turning into a reserve for children of the rich.

 

Higher education was free in the Soviet Union, but since that country dissolved, private institutions have opened and state institutions have been allowed to charge fees to students who fall below acceptable scores on entrance exams but who are willing to pay for the right to study.

 

At Moscow State University, one of the country's top institutions, for example, about 10 percent of the 40,000 full-time students pay from $1,500 to $4,000 in tuition per year.

 

In addition to carrying low interest rates, the loans will be repayable over a 10-year period after graduation. They must be cosigned by a student's parents or guardians.

 

 

Copyright 2000 by The Chronicle of Higher Education