Issue link: https://maltatoday.uberflip.com/i/1541557
6 maltatoday | SUNDAY • 23 NOVEMBER 2025 OPINION With the increase in the use of AI solutions, public expectations have started to shift, driven by the awareness of the need for safety, accountability, and fairness' Access to higher and special- ised education has always been a national priority for Malta. For many students, however, affordability remains a chal- lenge, particularly when stud- ies involve postgraduate or overseas programmes. Over time, Malta has progressively expanded its range of financial support mechanisms to make higher education more accessi- ble and sustainable. The Malta Development Bank's StudentAssist scheme builds on previous initiatives that helped students pursue advanced education. Rather than offering direct subsidies alone, it refines the existing model by using public funds to also guarantee loans provided by commercial banks. Through this structure, a relatively mod- est investment of €1.5 million in EU and national funds un- locks around €6.25 million in total lending. The participat- ing banks, APS Bank and Bank of Valletta (BOV), provide the loans, while the Malta Devel- opment Bank (MDB) manag- es the guarantee mechanism in collaboration with the EU Funds Ministry, which secured the financing under Malta's EU funding framework. The structure allows the MDB to share part of the risk with private lenders, enabling banks to support students who might not meet standard lending cri- teria. Borrowers are not asked for collateral, upfront contri- butions, or a life insurance. Instead, decisions are based on academic potential, and future employability rather than fam- ily assets. This reflects an evolution in how Malta approaches so- cial investment. Development banks exist to address market failures that neither the pri- vate sector nor government spending can resolve alone. In this case, the gap lies in fund- ing education. Banks are un- derstandably hesitant to lend to individuals without income, while the state cannot continu- ally expand grant programmes. A shared-risk model bridges that divide, combining public policy objectives with financial sustainability. Malta has already rolled out this type of structure success- fully. MDB's earlier FSMA and FSMA+ programmes chan- nelled about €33 million to 800 students, demonstrating both the model's feasibility and the existing demand. StudentAssist builds on that foundation with a more comprehensive under- standing of modern education needs. The scheme applies to full- time, part-time, and distance learning programmes across MQF Levels 5 to 8 and inter- nationally recognised equiv- alents, covering everything from advanced diplomas to post-doctoral studies. It also recognises the full cost of ed- ucation, extending coverage beyond tuition to accommoda- tion, living expenses, and trav- el. With a ceiling of €100,000, the scheme provides flexibility for longer or more expensive courses without forcing stu- dents to piece together multi- ple funding sources. Beyond its impact on individ- uals, StudentAssist supports national economic priorities. Malta's growth increasingly de- pends on knowledge-based sec- tors where the demand for spe- cialised talent is rising. When capable students are unable to pursue higher qualifications due to financial barriers, skills gaps widen, and employers of- ten fill roles through overseas recruitment. Expanding access to education helps build local expertise and reduces depend- ence on imported talent. The social benefits are equally important. Access to education remains one of the strongest drivers of upward mobility. Financial exclusion limits op- portunity and reinforces ine- quality, particularly for families unable to provide collateral or personal guarantees. By shift- ing the basis of access from wealth to merit, StudentAssist helps create a more inclusive education system where am- bition, not background, deter- mines opportunity. Some may question whether student loans are the right solu- tion. Concerns about excessive debt are valid, particularly in countries where education bor- rowing has become a long-term burden. However, the Maltese model is structured to prevent such risks. The EU and nation- al funds are deployed to create a portfolio guarantee covering up to 80% of each individual loan, and a grant-funded in- terest rate subsidy covering interest payments during the moratorium period. The latter covers both the study period and the year following gradu- ation; repayment begins only once graduates enter employ- ment, aligning obligations with real earning capacity. From an institutional stand- point, StudentAssist highlights the Malta Development Bank's growing ability to design and manage complex financial mechanisms. It also shows how national bodies can translate EU policy goals into locally relevant tools. The EU Funds Ministry provided the policy and funding framework, while MDB worked closely with BOV and APS to ensure the scheme operates smoothly, connecting strategic intent to practical de- livery. The success of the initia- tive will ultimately depend on outcomes rather than lend- ing volumes. Indicators such as completion rates, graduate employability, and the range of courses supported will re- veal how effectively the scheme meets its purpose. More broadly, StudentAssist reflects Malta's continued de- velopment of a mature finan- cial ecosystem; one capable of using innovation to meet social and economic goals. It also cre- ates a foundation for similar in- struments in other areas, such as investment in renewable en- ergy, SME growth, and innova- tion finance. For students, the benefit is immediate: a realistic path- way to higher education that no longer depends on person- al wealth. For the country, the return is long-term: a more skilled, adaptable, and compet- itive workforce. StudentAssist reaffirms a sim- ple principle: The most valua- ble investment any country can make is in its people. MALTA has proven that its size poses no barrier to its ambition. In 2019, we were among the first countries to set out a compre- hensive vision for artificial intel- ligence (AI), long before today's breakthroughs have made the technology part of everyday con- versation. We recognised that in a world being reshaped by tech- nology, we cannot afford to be passive spectators. Today, as Malta realigns its National AI Strategy towards 2030, the question is no longer whether AI will boost our econ- omy and transform our society, but whether we will manage to shape that transformation or be shaped by it. The 2019 strategy helped us lay important foundations nec- essary to dream beyond. We strengthened our digital infra- structure, attracted new invest- ment, encouraged digital inno- vation across sectors, and raised public awareness about AI. We invested in education and skills. We positioned Malta as a seri- ous, credible player in European and international discussions on emerging technologies. But the world has changed fast- er than many predicted. Gener- al-purpose AI systems are now universally accessible. European regulation, including the AI Act and other digital frameworks, have come into play. And with the increase in the use of AI solu- tions, public expectations have started to shift, driven by the awareness of the need for safety, accountability, and fairness. That is why the realigned AI strategy is not simply an update, but reflects a new mindset. And it is in this spirit that feedback on the draft strategy is being sought from the stakeholders and the general public. In the strategy, we are moving away from a technology-first ap- proach and placing people and societal well-being at the centre. AI must serve the communi- ty, not the other way around. It must help our SMEs compete, our public sector deliver better services, support the healthcare system, education, and environ- mental goals. The technology and economic aspects then arise as side effects of this, not the other way round. To achieve this, the strate- gy focuses on two main ena- blers: An informed public and a skilled workforce, citizens who understand what AI is and what it is not, and workers who can use these tools effectively and responsibly; robust regula- tory, policy, security and sup- port structures with clear rules, strong institutions, and the right incentives for innovation that re- spects our rights and values. Quality data, tools and public, private sector adoption Built on these foundations, the strategy focuses on three pillars: Ensuring access to quality data and infrastructure; leveraging AI to improve public services and private-sector competitiveness; and advancing AI research and innovation so that Malta con- tributes to, rather than merely consumes, the technologies of the future. The strategy aims to go beyond a checklist to be implemented and owned by government. It aims to be implemented with educators, entrepreneurs, work- ers, unions, civil society and the public. This is why feedback to this proposed strategy from the public and from the stakeholders is important more than ever. With the speed of development of new technology, it is impor- tant that our vision extends be- yond the electoral cycle, so that today's young generation will grow up in a Malta where tech- nology expands, rather than con- strains, their choices—a country that is digitally advanced but still deeply human. StudentAssist: A fairer shot at success Malta's realigned AI strategy: A Human- Centred Vision Alison Micallef Silvio Schembri CEO Malta Development Bank Economy Minister