It should be investigated whether state finances are better directed in the direction of Iceland’s Student Loans Fund that towards its Unemployment Fund to encourage more people to study, according to Icelandic Education Minister Katrin Jakobsdottir in parliament Monday.

Jonina Ros Gudmundsdottir, a Social Democrat MP, had asked the minister about the possibility of increasing student loans for the upcoming academic year, at least in line with inflation. “There has to be a viable way of living off these loans,” she said.

Jakobsdottir replied that such increases would cost the state an extra ISK 1.4 billion, which is money the Ministry for Education cannot afford in a time it is obliged to cut back, visir.is reports.

The minister went on to say that it should be looked into whether some sort of interplay between the student loans and unemployment benefit could be established between the ministries of education and social affairs. Including possibly changing the rules so that being registered to study does not remove a person’s right to unemployment benefit.

It is also being investigated whether it could prove economically possible to put more extra public funding into student loans than into unemployment benefit.

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