Quality-of-life comparisons between the U.S. and Nordic countries are common. For many years, Denmark, Finland, Iceland, Norway, and Sweden have been held up as strong examples of societies where citizens enjoy free healthcare, free college educations, lengthy paid parental leave, and a secure retirement.
To see if these Nordic societies are actually enjoying better living conditions than the rest of us, I spoke to college-educated individuals in their twenties and thirties who were living in Copenhagen, Oslo, and Stockholm, as well as similar-aged college graduates in Atlanta, New York, and Washington, D.C. I asked them about their current and past living conditions and if they had accumulated any student loans. My overriding goal was to discover whether or not these young Northern Europeans were any better off than their counterparts in the U.S. While not an exhaustive or scientific survey, it did offer some interesting and even eye-opening insights.
A Tale of Two College Experiences
It’s well documented that the college debt crisis is spiraling out of control in the U.S. In the article “At What Cost? How Student Debt Reduces Lifetime Wealth,” Demos senior policy analyst Robert Hiltonsmith writes that “an average student debt burden for a dual-headed household with bachelor’s degrees from 4-year universities ($53,000) leads to a lifetime wealth loss of nearly $208,000.” He adds that student debt quadrupled from $240 billion in 2003 to more than $1 trillion today.
The rising cost of tuition at our nation’s colleges is the primary reason for all the student debt. Recent data from the report “Trends in Higher Education” by the College Board show that “average published in-state tuition and fees at public four-year colleges and universities increased by 21% beyond the rate of inflation over the five years from 2004-05 to 2009-10, and by another 17% between 2009-10 and 2014-15.”
Our college debt crisis is in stark contrast to the experience of Nordic college students. All Nordic countries offer tax-funded tuition, which means college students pay no tuition fees. But what about the other expenses of a college education? Each country also has different grants and loan systems for assisting students with living expenses; so Nordic students actually do incur significant college debt, just not nearly as much as students in the U.S. The SU (Statens Uddannelsesstøtte) system in Denmark has the most generous student financial aid program, offering six years of free grants that cover students’ living expenses in addition to free tuition.
Life in Oslo
Line C. Gjerde is a 29-year-old Norwegian who over the past nine years earned the designation of a licensed clinician in psychology, called a cand.psycho degree, along with a PhD in psychology from the University of Oslo. Gjerde accumulated college debt for living expenses courtesy of the Norwegian State Educational Loan Fund, called Lånekassen. She owes about $37,000 in loans and is currently on a reasonable repayment plan of $245 per month. She estimates her loan will be paid off in about 25 years.
During the six years she studied for her degree, Gjerde held a variety of jobs that helped her cover her living expenses. She then competed for and was awarded a three-year PhD research fellowship in behavior genetics at the Norwegian Institute of Public Health. The fellowship came with a livable full-time salary. After completing her PhD, she was “officially hired” by the Institute as a post-doc, and is now earning a comfortable middle-class income.
Gjerde and her boyfriend recently bought a three-bedroom, 1,150-square-foot apartment in a central area close to downtown Oslo. She lives within walking distance of her current job.
“I think it is quite common to be in a situation like mine to buy your own place,” she says, “but it is expensive.” The new place sold for about $612,000 and required a 10% down payment on the mortgage. Her share of the mortgage is about $1,350 per month. “I am happy with the way things turned out for me after earning my degrees,” she says. “I earn enough to support myself. There are many people here who do not enjoy paying their taxes, but I actually do enjoy it because we get so much back.”
There are many people here who do not enjoy paying their taxes, but I actually do enjoy it because we get so much back.”
Michael Booth, the author of The Almost Nearly Perfect People: Behind the Myth of the Scandinavian Utopia, implies something less rosy on the issue of taxes. “Scandinavian people are like ‘lobsters in the cooking pot,’” he explains in an email. “Their tax rates have slowly crept up to what appear to outsiders to be obscene levels since World War II in order to cover their free-to-all education provision, among other expenditures. It was gradual, so, like the lobsters in the pot, they remained oblivious to the increasing heat.”
A New Yorker’s Dilemma
Comparing Gjerde to Upper East Side Manhattanite Rory Sacks reveals stark differences. While all things are not equal due to the population of Manhattan being two and a half times larger and denser than Oslo, Gjerde is still in a better position to thrive in Norway’s high-energy urban center.
The 30-year-old Sacks did not incur college debt while earning a master’s in secondary education because he was assisted financially by his grandfather. He’s currently an instructional designer at Mount Sinai School of Medicine, earning a slightly above-average salary for his job category.
It took Sacks five years after college to arrive at his current position. “It was almost as difficult as finding a place to live in New York City,” he explains. “Anyone who has ever lived here will tell you that finding the right, affordable place is one of the worst experiences on the planet.”
He mentions an 850-square-foot one-bedroom he shared with a former roommate that rented for $1,850 per month, “which is pretty good in New York City.” However, “the amount of money you have to put down is absurd. They want first, last, and a security deposit. You also need to pay a broker to help you find a place because finding an apartment without a broker is like taking on a second job. Overall, we had to put down $7,400, a huge financial undertaking.”
When he and his roommate went their separate ways after their lease was up, Sacks spent a month searching for a new apartment. He found a three-bedroom in a four-floor walkup within walking distance of his job that he now shares with two other male working professionals in their early thirties. His cost is $1,450 a month for a 400-square-foot room. There’s one shared bathroom and no living room. The shared kitchen is only 70 square feet.
“Last winter, our heat was out for two weeks in February, so I had to stay at a friend’s place,” Sacks says. “I’ve lived in apartments where there was ice and even bedbugs–it is unfortunate and comes with the territory.”
His forecast for the future: “Eventually I am going to have to move, whether that is in two years or in five years. I really can’t afford this. I am literally saving to move out.”
Opting for U.S. Debt in Stockholm
Carl-Johan Kullving is a 25-year-old Swedish native who lives and works in Stockholm as a web content manager and journalist for the Swedish national evening tabloid Expressen. He earned a bachelor’s degree in political science from Lund University.
He owes about $17,500 to Sweden’s National Board of Student Aid, called Centrala studiestödsnämnden. Under his current loan repayment plan, Kullving pays $180 every three months. He rents a 300-square-foot studio for $580 per month that is located less than one mile from his job.
Kullving’s next career move is taking him to New York City this fall, where he has enrolled in a one-year master’s in journalism program offered by Columbia University at a total tuition cost of $50,000.
He will be living with two other international students in a university-owned three-bedroom apartment in West Harlem that will cost him an additional $1,000 per month. In order to fund all this, he will be taking out more loans from the National Board. Plus, he has been awarded about $8,000 in scholarships from Sweden and plans on using all of his savings. By the end of his Columbia experience, he expects to more than double his current student loan debt to about $42,000 total. “I see it as an investment for the future, but I will have huge debts after graduating and will really need to find a job with a good wage, hopefully in the U.S.,” Kullving explains.
$100,000 in Debt in Atlanta
Robin Greiner is a 36-year-old upwardly mobile communications specialist living and working for a major bank in Atlanta, Georgia. He hails from Buffalo, New York, where he grew up in a low-income single-parent household.
Grenier has $100,000 in federal student loans after dropping out of graduate school after one year of study. He has enormous debt largely because it took him a while to get his academic legs up to speed when he was a community-college student.0
His reliance on loans began after he failed a good number of courses (36 credits total), disqualifying him for any federal or state grants. Grenier spent five years at the community college before transferring to SUNY Buffalo State College.
Was it difficult to obtain these federal loans? “No, I just had to ask,” he says, adding that “they should not have been giving me so much money. When I got to Buffalo State, it was around $6,000 per semester, and by the time I went to grad school, I was getting $15,000 in one semester.
“Honestly, I did not realize at the time what I was getting myself into. They tell you, ‘Here is your paperwork. This is how much you can get. Take it.’”
Regardless of his huge debt problem, Grenier does have a bright future. His current repayment plan of $800 a month has covered only interest thus far from deferring payments for several years due to working mostly low-paying jobs after leaving college. But he does have a silver lining.
Since 2008, when he left Buffalo and headed south for better career opportunities, he has consistently earned promotions that have taken him from low-paid bank teller to his current professional position, which pays an upper-middle-class salary and is expected to reach six figures by next year.
Providing that Grenier maintains his current income and anticipated raises, he should be financially capable of achieving his personal version of the American dream. “If I can do it, anybody can,” he says with confident optimism.
Life as a New Grad in D.C.
KellyAnn Kirkpatrick is a 22-year-old with a bachelor’s degree in public relations from Boston University. She is a paid summer fellow with Young Invincibles, a Washington, D.C.-based nonprofit.
Kirkpatrick’s highly ranked academic background from a large high school in Atlanta got her a coveted all-tuition-paid scholarship, but she still ended up taking out $40,000 in federal loans for living expenses.
In D.C., where rents are notoriously high, Kirkpatrick was lucky to obtain a $350-per-month rental agreement provided through a coworker and older sorority sister who owns a home in northeast D.C., within walking distance of the Metro. She plans on pursuing a solid career in the D.C. area once her fellowship comes to a close.9
An interesting observation from Kirkpatrick concerns relationships: “Even in my dating life, my student loans come into play,” she admits. “Sometimes if I end up dating somebody and get to know them well enough to talk about finances and how much school cost–and we both have a ton of student loans–then I have to look at the long-term trajectory if we were to ever start to think about marriage. I don’t know if we would be able to afford a family. I think this is a consistent concern with millennials.”
Contented in Copenhagen
Before I connected with my last interview, I spoke with Kay Xander Mellish, author of How to Live in Denmark: A Humorous Guide for Foreigners and Their Danish Friends. Meillish notes that “over the past 20 years, Denmark’s economic activity has become more centered on the capital of Copenhagen. The vast majority of career-track jobs are in Copenhagen.”
The 32-year-old Søren Scheibye fits that billing perfectly, born and raised in a suburb of Copenhagen, now happily married with a newborn daughter and living in the city. He is a self-employed entrepreneur in real estate finance. He’s also a musical performer who recently played Scuttle the Seagull in The Little Mermaid at the world-famous Copenhagen Opera House. He reached this plateau by spending six years at the University of Copenhagen, earning a master’s in economics, and then three years at the Danish Academy of Musical Theatre, building his chops through a special acting, song, and dance program that is similar to a fine-arts degree in the U.S.
Scheibye does not have any college debt. His six years at the university were covered by the Danish government, summer jobs, and some parental support. His three years in the arts program were covered by an inheritance from his grandfather.
The Scheibyes live in a five-story centrally located cooperative housing unit, which is a common living arrangement in Copenhagen. Such co-ops entail buying percentage shares of property (about 50% ownership) as well as paying rent to a cooperative organization that manages the property. Tenants vote on housing rules and regulations. The Scheibyes have a 1,000-square-foot unit that costs $1,550 per month ($600 for rent and $950 on a mortgage loan). To qualify for this arrangement in 2011, they had to come up with a $15,000 down payment on a total price of about $145,000.
“This is a big apartment in Copenhagen,” Scheibye says. “Normally people in our situation would have an apartment that would be about 600 square feet. [Co-op housing] is also a very inexpensive type of housing, with capped prices. A flat like this with 100% ownership would be ridiculously priced. We could not afford it.”
Scheibye explains the give and take of the Danish tax system: “The idea of the Danish system is that the government pays for your education, and we also have a housing system that makes it more affordable for everyone to live in the city. But we have to pay the price. Nothing is free. The government hopes that I will make a lot of money so they can get some taxes back.”
This article was first published at Fast Company in July 2015.