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NewsLatvia: Students to get affordable European-backed study loans through ALTUM

Latvia: Students to get affordable European-backed study loans through ALTUM

European Commission
European Commission
The European Commission (EC) is the executive branch of the European Union, responsible for proposing legislation, enforcing EU laws and directing the union's administrative operations. Commissioners swear an oath at the European Court of Justice in Luxembourg City, pledging to respect the treaties and to be completely independent in carrying out their duties during their mandate. (Wikipedia)
  • Students and learners in Latvia are expected to benefit from a new European Investment Fund counter-guarantee to ALTUM, making available cheap loans to cover study costs.
  • The guarantee programme is supported by the “Skills & Education Guarantee Pilot” under the European Fund for Strategic Investments, main pillar of the Investment Plan for Europe.
  • Up to 13.500 students and learners in Latvia are expected to benefit from favourable loans to support their studies as well as their cost of living.

Together with Latvian banks, ALTUM and the European Investment Fund, backed by the Investment Plan for Europe, are enabling more favourable lending to students and learners in Latvia, to cover their study and housing costs. The EIF has signed a guarantee which will enable ALTUM to continue its guarantee programme for Latvian banks, supporting students and learners in Latvia. In total, up to 13.500 students and learners in Latvia are expected to benefit from cheaper lending conditions to cover their study and housing costs.

In June 2020, Altum launched a guarantee scheme with commercial banks in the country, to support financing for students attending university in Latvia. The loans can cover both tuition fees and living expenses. As the programme was very positively received by the market, the entire budget foreseen for the programme was soon fully committed. Now, the European Investment Fund – backed in turn by the “Skills & Education Guarantee Pilot” of the European Commission’s Investment Plan for Europe – is partnering with ALTUM to support the continuation of the programme and increase the number of beneficiaries. Thanks to the EFSI Skills & Education Guarantee, Altum will not only be able to support a larger number of Latvian universities’ students and learners, but also extend the programme to non-academic trainings for learners and tuition fees and living expenses for students studying abroad.

Valdis Dombrovskis, Executive Vice-President for an Economy that works for people, said: “It is important to invest in young people and the future of our economy. I am glad to announce that with support of the EIF and the Investment Plan for Europe, students in Latvia who are looking to advance their education and skills will receive loans under favourable conditions to do so. Expanding an existing guarantee scheme will allow even more young people to cover their tuition fees and living expenses.”

EIF Chief executive Alain Godard commented: “This scheme is hugely important in allowing more people to attend higher education and develop their skills, with both personal and economic benefits, especially for those who would otherwise not be able to afford it. ALTUM’s programme is an excellent initiative and we are glad to be able to rely on the support of the European Commission to achieve this.”

Reinis Bērziņš, ALTUM Management Board Chairman, “The guarantee of the European Fund for Strategic Investments gives the possibility that starting with the next academic year the guarantees of study and student loans will be available to more students, regardless of changes in demand. There is another important improvement expected in the EFSI guarantee – after making amendments to the relevant regulations of the Cabinet of Ministers, it will also be possible to receive study and student loans for studies abroad. With our experience and knowledge, we are ready to continue issuing guarantees, as well as invite new partners to get involved in the study and student lending, so that funding becomes more and more accessible to students.

Currently, study and student loans in Latvia are issued by Swedbank. Since the beginning of the programme, more than 3300 study and student loan agreements have been signed with the ALTUM guarantee for a total amount of over 23 million euros.

Background information:

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

The European Fund for Strategic Investments (EFSI) is the main pillar of the Investment Plan for Europe. It provides first loss guarantees enabling the EIB Group to invest in riskier projects. The projects and agreements approved for financing under EFSI have so far mobilised €546.5 billion in investment, benefitting over 1.4 million SMEs. The Skills & Education Guarantee Pilot (S&E Pilot) is a debt financing initiative dedicated to stimulating investments in education, training, and skills – as part of the solution to get more people into jobs and to better respond to the European economy’s changing needs. Investments in skills contribute to growth, competitiveness, and social convergence while addressing the challenges linked to digital transformations and the transition to a carbon-free economy.

ALTUM is a state-owned development finance institution, which offers state aid for various target groups with the help of financial tools (such as loans, credit guarantees, investment in venture capital funds, etc.). ALTUM develops and implements state aid programmes to compensate for the market’s shortcomings that cannot be solved by private financial institutions. In June 2017, ALTUM was awarded the international credit rating Baa1 by Moody’s, which approves its strong financial stability.

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