the contingent loan under debate

How do French students finance their studies? Very often thanks to the help of their family – support up to 42% according to Student Life Observatory (OVE). Then there are the odd jobs that nearly half of French students accumulate and which account for 25% of their income. Then come public aid (grants, APL, etc.) which represent 23% of resources and finally, in last place, bank loans (2%).

While, each year, the reports add up on the increase in the cost of the start of the student year, that the precariousness of part of the student population (aggravated by the health crisis) was revealed in 2015 by a report of the general inspectorate of social affairs, young French people are few to take on debt to finance their studies. A parliamentary information report, published in July 2021, underlines this particularity of French higher education, while the subscription of a loan is very widespread in Great Britain, Germany, Denmark and Sweden where 70% of students use it.

This culture of student debt is based on the idea that obtaining a diploma increases future income and that part of this gain can be devoted, initially in the career, to repayment. Debt would be an investment.

Opposition from student unions

However, these loans taken out in large numbers by our European neighbors do not resemble the traditional loans to which French students are subject: they are loans with contingent repayment to income (PARC). They have the particularity of being reimbursed only when the borrower has acquired a sufficiently high level of income. And that the state vouches for it.

“Putting a generation in debt that is already struggling to get by financially cannot be a solution. »Paul Mayaux, President of FAGE

The establishment of contingent loans to finance training has already been proposed by France strategy in 2017; it was acclaimed by theInstitut Montaigne in April 2021, and still appears among the recommendations of the parliamentary information report cited above, as well as in the December 2020 report of the “Social and territorial diversity in higher education” strategic committee, led by Martin Hirsch, director of the Public Assistance-Hospitals of Paris. But its establishment does not come up against the disagreement of student representatives.

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The first criticism is the very principle of indebtedness. “Putting a generation into debt that is already struggling to get by financially cannot be a solution”, estimates Paul Mayaux, president of FAGE, the main student union. “There is no culture of borrowing in France”, analysis Nicolas Charles, professor and researcher in sociology at the University of Bordeaux. While in Sweden or Great Britain, contracting a debt to pay for your studies is commonplace, the principle is not yet generally accepted in France.

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