Student loans to require residence permit

Six applicants for student loans and grants have taken Luxembourg to the European Court of Justice after being turned down by the country’s student loan scheme, CEDIES, on the grounds that they are children of frontier workers. CEDIES claimed that eligibility requires residence in Luxembourg. A court ruling is expected later this year.

In his opinion to the Court on 7 February, Advocate General of Luxembourg Paolo Mengazzi stated that “financial aid for higher education is granted to citizens of Luxembourg and other EU citizens on the conditions that they are residents in Luxembourg”.

Referring to Article 203 of the Luxembourg Civil Code, he wrote that “the students in question must be considered to be the financial responsibility of their frontier worker parents”.

In European Union (EU) formal language, what distinguishes frontier workers from traditional migrant workers is that frontier workers live in one state and work in another, while migrant workers leave their country of origin completely, with or without their family, to live and work in a different country.

In the preliminary hearing of the case, Elodie Gierts and others vs Luxembourg, it was estimated that another 600 students in Luxembourg are in the same position, requesting a study loan or grant from Luxembourg on the basis of their parents working there without having official residence.

The Minister of Education in Luxembourg has estimated that current grants to students in Luxembourg amount to €88 million (US$115 million). If the service were to be extended to the children of commuting workers, this sum could rise to more than €250 million.

Almost half of the people who work in Luxembourg are non-residents of the Duchy. In 2011, 156,600 people were commuting from other countries to work in Luxembourg: 25% were residents of Belgium, 49% were residents of France and 25% were residents of Germany.

The argument of the six students is that CEDIES’ refusal amounts to discrimination and violates the EU treaty on the free movement of persons.

The attorney general disputes this, arguing that student financing is not a social benefit, but an investment supporting the development of the economy.

Luxembourg hence argues that education is a national affair and that the financial aid scheme is aimed at supporting students who are going to live and work in Luxembourg. It is also estimated that the country needs 50% more native graduates to ensure its independence from imported labour.

Higher Education Minister Francois Biltgen is optimistic that Luxembourg will win the case.

In a recent interview he referred to a European Court decision related to The Netherlands, where the law states that a person must have been resident for three out of the past six years in the country and not be over 29 years of age in order to benefit from the support.

Luxembourg, however, does not have such a clause in the law on student financing. Eligible students can use the loan and grant to finance living costs or tuition fees at a higher education institution anywhere in the world.

Thus, should the court decide that frontier workers' children are eligible, the consequence would be that a French child of a frontier worker in Luxembourg could be eligible for studies in the US or Australia, financially supported by Luxembourg.

In a recent case in Denmark, the European Court of Justice ruled that an EU citizen who moved to Denmark for work should be eligible for study loan and grants from Denmark, even though the person in question had applied for a higher education programme before coming to Denmark.