Russia’s top lender Sberbank and the government have introduced new subsidized student loans to help young people afford the best universities.

Demand for higher education in Russia is the highest in the world, measured by the proportion of young people who go to university. Half of all Russian students study for free – but the government believes access to the best education depends on money as well as talent.

Herman Gref, CEO of Sberbank says everybody will be able to afford 5% interest on student loans – the first year’s payment will average 3 dollars a month.

“There will be no additional payments, the student doesn’t need to prove his solvency, and the loans are issued without a guarantor.”

The current interest rate on education loans is 25%. Yaroslav Kuzminov, Rector of the Higher School of Economics says more affordable loans will help develop human capital – one of the things that attracts foreign investors to Russia.

“The key characteristic of any region, where the companies consider investing – is the quality of professionals and labor. These new subsidized loans will boost the human capital of Russia. We will see the results in 5-7 years.”

In the west about a quarter of students take loans. This year the Russian government is alloting $25 million for education loans. But that will be less than one per cent of those climbing the stairs of learning.