Hungary’s unique program to encourage children through student loan relief

Hungary’s fertility rate is about 1.5, or roughly in the middle of European countries, which range from about 1.25 to 1.8.  It is facing a demographic crisis. Its population will continue to grow slightly, but if you assume a very modest emigration of working age population and increase of life span, the ratio between the elderly and the working age populations will change dramatically in 20 years – say from about 1/3 to 2/3.

The Hungarian government offers a student debt cancellation program tied to getting married and raising a family. For several years, Hungary has offered first time mothers with student loans for a three-year suspension of the loan payments after the birth of their first child. Having a second child results in halving the remaining student loan balance,  and having a third child wipes away the balance entirely. From the beginning of 2023, the government announced women with student debt who have a child before their 30th birthday and within two years of the completion of the studies (or during) will have the entirety of the student loan debt forgiven.

Hungary also has in place child-bearing incentives which are commonly used or considered in other countries: cash payments and tax breaks; 24 week maternity leave; childcare; low interest loans for home buying; and job protection for mothers.

Source: Gladden Pappin, Requiem for the Realignment, American Affairs, Spring 2023.

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