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ECJ establishes EU-wide right for students to loans and grants

Published 16 March 2005 - Updated 29 January 2010
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Reflecting that EU integration has moved on, the European Court of Justice has passed a landmark ruling asserting the right for students to obtain loans and grants in another member state in which they are "settled".

The mobility of students in the EU has been successfully promoted through the ERASMUS programme. But the allocation of grants and loans to students residing in another member state has hitherto remained a domain dealt with by national ministries of education, which have largely excluded non-nationals from benefits.   

The ECJ had in a previous ruling refused a student the right to obtain loans and grants while studying in another member state. 

A verdict from the ECJ on 15 March 2005 changes that. It takes into account the change of the legal foundation of the EU stemming from the Maastricht treaty of the European Union, which introduced citizenship of the Union and also added a chapter on education and vocational training.

A French national, Dany Bidar, had legal residence in the UK for three years while being in secondary school. He was given financial assistance with his university tuition fees, but the problem arose when he was then refused a maintenance loan.

The UK authorities argued that he was "not settled" in the UK. Bidar took the issue to court arguing that he was being discriminated against on the grounds of nationality.

Positions: 

The ECJ ruled that there was indeed a case of discrimination. But before getting to this conclusion, it states that it is "legitimate for a host Member State to grant such assistance only to students who have demonstrated a certain degree of integration into the society of that State", adding that member states have a right to protect themselves against 'grant-tourism' in order to "ensure that the   grant of assistance to cover the maintenance costs of students from other Member States does not become an unreasonable burden which could have consequences for the overall level of assistance which may be granted by that State". 

However the ECJ rules that Dany Bidar was indeed to be considered as "settled" as he did have "a genuine link" with the UK, but that "English legislation precludes any possibility of a national of another Member State obtaining settled status as a student", which makes him unable to "pursue his studies under the same conditions as a national of that Member State. It is therefore incompatible with Community law".

According to the UK daily paper the Daily Telegraph, a UK Government press officer said that the number of EU students who would directly gain from the ruling was "very limited". "There's no question of any floodgates being opened." 

The UK Department of Education and Skills, however, seemed to be already preparing for the new situation. Officials said that they would now be looking at what factors might demonstrate "a certain degree of integration" into British life, quoting the new requirement expressed by the ECJ ruling. 

According to a spokeswoman from the department for Education and Skills, the ruling "implies that most EU students will continue to be ineligible" for loans and grants. We will study the judgment carefully to see what modifications are needed to our eligibility rules. However, it is clear that only a very limited number of EU students who meet specific criteria will be able to benefit from this judgment". 

Tony Venables, director of the NGO European Citizens Action Service (ECAS), called it an excellent judgement: "We have had cases where students were refused loans and grants. There may not be a lot of new cases now, but we are particularly happy that the Court bases itself on European Citizenship. We will now have to see how the ruling will be applied in practice by member states. It is too early to say if it will have an effect on other areas than education," said Venables to EurActiv.

Background: 

The free movement of persons stands at the heart of the internal market philosophy. However, the issue of whether an EU citizen, who is legally settled in another member state, can also benefit from support schemes of the host state, ranging from unemployment benefits to student loans, has remained a delicate one.   

The issue has further touched political sensitivities after the enlargement of the EU in 2004, when some EU-15 countries introduced laws to counter populist-driven fears of EU-10 citizens' freeloading on welfare benefits schemes.  

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