13 October 2023, by Emily Proctor
From January 1, 2024, the interest rate on Dutch student loans will rise to 2,56 percent – more than five times higher than the current rate of 0,46 percent. The new rate will also apply to MBO students, who currently pay around 1,78 percent interest on their debts. Many students and student associations have expressed anger at the Dutch government for the decision to raise the interest rate.
Student loan interest rates fixed for five years in the Netherlands
Interest rates on student loans taken out in the Netherlands are fixed for five years, and students have 35 years to pay off their debts after they have graduated from university. Nevertheless, there are many students and student groups who have expressed concern about access to education for people who cannot afford to pay the new, higher interest rate for loans on tuition fees.
One student, Meis van der Ham, told Dutch broadcaster NOS that “it’s all completely ridiculous,” explaining that she started borrowing money seven years ago to fund her degree and that she feels betrayed by the system. “I got the impression that the income from the loan system would be invested by the government in the quality of education,” she added.
Former students may now have to pay back significantly more money
According to NOS, many former students will have to pay back much more money than they anticipated due to the new interest rate. “Tuition fees are rising, the purchasing power measure will not be extended. Students are faced with one blow after another,” Demi Janssen, Chairperson of the Intercity Student Consultation (ISO) told NOS. “And now also former students. This is really quite something.”
The higher interest rate comes after a series of controversial reforms in the Dutch higher education system, including the cancellation of the old student financing system in the 2015 / 16 academic year, and the introduction of the new loan system after that. This resulted in the government having to pay compensation to the so-called “unlucky generation” who missed out on the old system.
Outgoing Minister of Education Robbert Dijkgraaf said that he can imagine that there are concerns among students. “That is why we as a government want to offer students financial peace”, he told NOS. The minister pointed to the basic grant, expanded supplementary grant and the availability of the energy allowance as programmes that help students who are struggling financially.
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