Pinched by years of recession, Hungary is desperate to keep its skilled young professionals from bolting the country after attaining an education.

A new policy aims to do just that -- but now, Hungary's best and brightest are feeling pinched by an increasingly demanding government.  

In February, the parliament announced an education policy overhaul. For would-be university students, the new law included two monumental changes.

The first was a giant slash to state-funded tuition. As it has for years, the government will continue to subsidize university fees for high-performing students. But now those awards have become much more selective, with funding reduced by nearly 40 percent. The BBC reports that certain fields of study, including law and economy, will see huge funding cuts -- other fields, like engineering, will be left largely untouched.

This year, for instance, only 50 incoming university students in the entire country were able to qualify for free tuition in pursuit of a law degree.

The new policy's second major aspect is even more controversial. Hungary now stipulates that those students who benefit from a state-sponsored education must sign contracts promising to stay in the country for several years after graduation. The length of this commitment varies with the length of a student's education; someone who completes state-funded graduate-level studies will have to stay longer than someone who only spends a few years at university.

In that way, the amount of government investment per student is proportional to their post-graduation commitment.

The idea is to prop up Hungary's faltering economy by limiting what is called a "brain drain," or the tendency of well-educated individuals to leave their home country and put their skills to use elsewhere.

But today's educated Hungarian youths have plenty of reason to skip town.

Clamping Down

The European recession has imposed some major changes upon Hungary over the past two years. The formerly Socialist government, which was saddled by corruption, came under fire when the economy began to slow down in 2008. The 2010 elections resulted in a serious realignment. Voters, eager for new direction, elected politicians of the center-right Fidesz-Hungarian Civic Union Party to a full two-thirds of parliamentary seats.

The Fidesz bloc is led by Prime Minister Viktor Orban, a former anti-communist activist who has presided over what many have deemed an authoritarian overhaul of the Hungarian government. This included a brand new constitution, which sailed through the Fidesz-dominated parliament.

It was implemented on Jan. 1, 2012.

On Jan. 2, tens of thousands of Hungarian citizens gathered outside of the government building in a rare public protest.

"We want the rule of law back and we want the republic back," said rally organizer Petr Konya in a speech to the crowd, according to the New York Times.

"Viktor Orban forgot that the power belongs to the people, it belongs to us, and we will get it back from them."

The January constitution severely restricted the freedom of independent institutions, most notably the National Bank of Hungary. This has resulted in censure from the European Union, including legal proceedings meant to force a dial-back of some of Orban's most objectionable reforms.

The International Monetary Fund, or IMF, also took up the dispute, refusing to allocate funds to Budapest unless the government agreed to its suggested changes.

A tentative deal was reached last month, with Hungary's Parliament voting to approve some of the IMF's suggested measures and the IMF agreeing to begin negotiations for loan assistance. But overall, Budapest's months-long back-and-forth with external critics seems to have resulted only in halting progress for Hungary.

International observers still point to an inordinate amount of governmental control over the central bank, as well as heavy restrictions on the media and the judiciary system.

And the country's economy continues to struggle. Hungary is the most indebted country in Central Europe, according to Reuters.

Unemployment is hovering around 11 percent. The national GDP contracted in the first quarter of this year, and a slew of desperate taxes seems to have raised more public resentment than public funding.

Sticky Paper

In this context, the requirement that government-sponsored university students seek jobs in their own country is just one more in a long line of sweeping changes over the past two years.

But is it legal?

Hungary is a member of the European Union and the Schengen Area, a special zone established in 1985 -- Hungary joined it in 2007, three years after it joined the EU.

Any citizen of one Schengen country has the right to travel to other Schengen countries freely -- there are no border controls between countries, and no passports required for international travel throughout the area. This freedom of movement was meant to promote commerce, and this involves the easy exchange of skilled professionals.

And that's not all.

One European Parliament directive from 2004, to which Hungary is party, seems to fly in the face of the new restriction on university students.

Directive 2004/38/EC holds that "citizenship of the Union confers on every citizen of the Union a primary and individual right to move and reside freely within the territory of the Member States."

Details on the right of exit from a home country are specified in Article 4.

"All Union citizens with a valid identity card or passport and their family members who are not nationals of a Member State and who hold a valid passport shall have the right to leave the territory of a Member State to travel to another Member State," it says.

"No exit visa or equivalent formality may be imposed on the persons to whom [the previous paragraph] applies."

This may sound damning to Hungary's new education policy, but in fact there is a loophole by which the controversial rules may stand.

Up in the Air

Hungary does not restrict all students from leaving the country -- the policy only stipulates that graduates must find jobs in Hungary as part of an agreement they sign, which they must do in order to receive government-sponsored tuition in the first place.

The vast majority of Hungarian students pay for college independently using loans, personal finances, or other means. These graduates would not be required to stay in Hungary. And even those who are awarded the free tuition can refuse it if they prefer not to be geographically restricted upon graduation.

In short, this new law essentially dampens the appeal of a government-awarded free tuition -- it does not impose surprise travel bans on all educated youths.

At least, that's how it stands at this point.

Since the policy is new, it won't be tested until it is applied to the first government-sponsored graduate a few years from now. Then, the details will have to be ironed out. At least a few students who signed up for government scholarships this year are sure to challenge their agreement down the road, at which point it will become clear just how inflexible this policy really is.

Until then, many of Hungary's young people will remain incensed by government's decision.

"When we grew up, there was this dream that everything is going to change. We were entering democracy and the EU, and Hungary was going to be different and a great place to live," said Dorottya Karsay, a 27-year-old activist, to the BBC.

"It's becoming clear that this is not a place where we want to live."