The Role of Student Loans Subsidized by the State in the Slovak Banking Sector

Abstract

The aim of this paper is to analyse student loans subsidized by the state in Slovakia and their role in the Slovak banking sector. There has been a slight increase in the Slovak banking market, especially the share of small and medium-sized banks. Student loans ensure equal educational opportunities for all students. Four years of a student loan provision in Slovakia can be briefly characterised as a socially oriented approach. The Slovak government, the founding owner of the Education Support Fund, has implemented numerous changes concerning the clients in the borrowing as well as in the repayment phase. The empirical analysis in this paper consists of the descriptive statistics focused on the Slovak student loan market and the financial analysis of the banking sector providing student loans in Slovakia. The most significant finding that emerged from our analysis is to provide every student enrolled in higher education with the information on accessible student loans with a low interest rates. The achieved results prove the decreasing role of student loans subsidized by the state within the Slovak banking market. However, the profitability of the Education Support Fund was significantly higher than the figure achieved by the Slovak banking sector in 2017.