Where to Get Money for School? At the Building Savings Bank

Press center »  Where to Get Money for School? At the Building Savings Bank

Hospodářské noviny, 16.8. 2007

Building savings banks want to loan money for school

For the first time, students in the Czech Republic will be able to take advantage of the lucrative savings plan for their future studies in university or college. They will also be able to borrow at a lower interest rate.

The Ministry of Education came to an agreement with the Association of Czech Building Savings Banks to offer these new services to young people.

?There will still be some discussion regarding the concept of loans. Nevertheless, we are pleased with the idea,? explains Vojtech Lukas, Chairman of the Association of Czech Building Savings Banks.

Students should be able to take advantage of the savings plan starting in 2009. ?We are going to initiate new legal steps regarding building savings. We are also still waiting regarding negotiations with the Ministry of Finance. We already know that Minister Kalousek is not pleased with the idea,? explains Simona Weidnerova from the conceptual analysis department of the Ministry of Finance.

Parents can start saving for their children as soon as they are born. The state would annually contribute 20% of the saved amount. The students could then get a maximum of six thousand five hundred monthly from the contribution. That is the approximate cost of tuition at a public university. The amount should cover costs associated with living, traveling, food and text books. ?If the student decides not to go to school, the money could then be put towards housing expenses,? explains Lukas.

According to the Ministry of Education the student would be able to withdraw the moiney at any time. They wouldn?t have to wait the five years that is necessary during the buildling savings plan.

?The student wouldn?t have to use the money every month. It could depend on whether or not they find a part time job,? adds Wednerova. If the saved money didn?t turn out to be enough, they could take out a loan, which they would start paying back after they had completed school.

Students will be able to borrow money from building savings banks

The benefits of the savings for school as well as the loans for students would only be available to students at one university of their choice.

?It?s impossible to give these kinds of benefits twice, if the student chooses to go to two schools at the same time,? explains Simona Weidnerova from the Ministry of Education.

According to estimations by the Association of Czech Building Savings banks about 20 percent of people under the age of 20 will be interested in the service who are already saving money for housing.

?Similar services that are connected with education were very successful when introduced in Austria two years ago. We?ll see how it will work in the Czech Republic,? stated Vojtech Lukas, Chairman of the Association of Building Savings Banks.

The Ministry of Education promises that thanks to the saving and loans, more people will go to university. Currently many people do not go to university because of the lack of money available which creates a social barrier that is criticized by the OECD.

?Experience abroad shows us that it is better for the state to provide more money for education directly to students rather than to the schools. This also reduces social inequality,? adds Petr Mateju from the Ministry of Education.

For more information about building savings in the Czech media, click here.

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