Report on the financing of continuing vocational training

A public committee considering the financing of students' subsistence while undergoing continuing vocational education submitted its report to the Norwegian Ministry of Education, Research and Church Affairs in November 1998. The committee examined the general regulations in the national scheme for educational funding, with a view to adapting the scheme to continuing vocational education.

The public committee deliberating the financing of subsistence during continuing vocational training and the role of the State Education Loan Fund (Statens lånekasse for utdanning), submitted its report to the Ministry of Education, Research and Church Affairs on 23 November 1998. The committee is one of several committees deliberating the reform of continuing vocational training (NO9812103F). The labour market parties are represented on the committee, alongside representatives from the State Education Loan Fund, the relevant ministries and educational institutions.

The committee examined the general regulations in the national scheme for educational funding, with a view to adapting the scheme to continuing vocational training. The present funding arrangements take the form of a mix of loans and grants, and their main focus is younger full-time students pursuing upper secondary or university education.

The committee's proposals

Questions concerning family allowance for students with families, and provisions on how loans and grants are calculated according to the level of income, were among the more important issues considered by the committee. In its report, the committee sets as a precondition that new regulations should be applied to everyone entering some kind of education, and not just those pursuing continuing vocational training.

The report proposes the following measures:

• the deduction-free allowance - ie the maximum level of earned income a student may be entitled to without this leading to a deduction in grants and loans from the State Education Loan Fund - should be increased from the present level. The committee was divided over what the maximum level should be, and the percentage to be deducted in respect of income which exceeds that level;

• the deduction rule on income exceeding the maximum allowed level should be applied to all kinds of incomes - earned income as well as other forms of income, such as grants other than those from the State Education Loan Fund. This is relevant because the labour market parties may in future choose to establish educational funds in order to finance a reform of skills and competence in Norway;

• the deduction-free allowance for part-time students should be increased, thus helping to improve the finances of this group;

• the committee was divided on the issue of family allowances. A majority argued that an allowance should be given to students with children below the age of 16, without any means test in relation to their spouse's income; and

• it is important, according to the committee, to alter the rules concerning the type of education to which the funding arrangements for students are applicable, in order to promote continuing vocational training.

The committee was also divided on how the educational funding scheme should be shaped for adults who have not completed primary or upper secondary education. A majority wanted to see an arrangement by which compensation for loss of income is of such a nature as to encourage adult employees to pursue further education. Thus the committee proposed that the State Education Loan Fund should provide student grants (not loans) to this group. The amount of the grant would be linked to the student's normal income and the maximum pay compensation would not exceed NOK 76,500 for what is estimated to be one year's full time study. Compensation should not exceed this amount - ie such grants would be given only for one year's full-time education. This scheme would also be limited to a period of 10 to 15 years.

However, a significant minority in the committee, including representatives from different ministries, was opposed to extending special funding to adults who want to pursue upper secondary education. The minority was also joined by the committee's representative from the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO). According to NHO, the results of the 1998 pay settlement negotiations were too costly (NO9805164F), and the costs of implementing such a scheme would put additional pressure on the economy.

Commentary

The proposal to change the present scheme for educational funding has a dual purpose. On the one hand, it is an attempt to adapt the scheme in order better to accommodate adults who wish to pursue continuing vocational education. This is achieved by making it easier to combine funding from the State Education Loan Fund (mainly loans) with other sources of income, including funding by the employer or other funding institutions. Employees completing continuing vocational education, however, will not receive any form of support from the government other than the support other pupils/students are entitled to. Thus, a precondition for the reform is that the labour market parties - by themselves, or in cooperation with the authorities - are willing to set aside funds during future pay settlements.

On the other hand, there are groups of adults without primary or secondary education (the so-called "new chance" group). When the national system for upper secondary education was reformed in 1984, every young person from the age of 16 to 18 was given a legal right to upper secondary education - ie the right to three years of education beyond primary and lower secondary education level. The new proposal aims to include the group previously not covered by this reform (those born before 1977), which will enable older people to acquire upper secondary education. In addition, the government wants to allow adults without lower secondary education to complete such education. The fact that a majority in the committee is in favour of placing a large part of the financial burden on the government must be ascribed to the potential difficulties in imposing such a burden on the labour market parties. (Kristine Nergaard, FAFO Institute for Applied Social Science)