Photo Shutterstock A House majority wants to lower the interest that students affected by the loan system pay on their student debts. By how much the interest rate is to be lowered and when is yet to be announced. A proposal to set the interest rate at zero did not make it.
Many (former) students were unpleasantly surprised when the interest rates on their loans jumped from zero to 0.46 per cent this year, while a further increase to 2.56 per cent was announced for next year. They already studied without a basic grant, and their debts are thus higher than earlier generations of students, and now faced a hike in interest rates.
Expats
Various political parties were willing to appease the so-called “unlucky students”. Representative Pieter Omtzigt proposed lowering the interest rates at the expense of the tax deduction for expats. The amendment he submitted was accepted by a House majority last night. GroenLinks, PvdA, ChristenUnie and Volt supported the submission of the amendment.
How this will play out for the students is unclear. The gradual retrenchment of the expat provision will add 3 million euros to the government budget in 2025, increasing to 194 million in 2029 and the years that follow. This line item will be ‘fully’ invested in lowering the interest rates paid by the “unlucky generation”. However, the amendment fails to specify when and by how much.
Freeze
A large majority of the House supported the GroenLinks motion calling on the government to freeze the interest paid by loan system students in 2024 at 0.46 per cent, pending a change in legislation. The costs incurred are to be covered by the retrenchment of the expat provision suggested by Omtzigt. The latter voted against the motion because he could not assess whether his proposal would sufficiently cover the costs. Earlier this week, Minister Dijkgraaf stated that setting the interest rate for loan system students to zero will cost some 9 billion euros over the course of 35 years.
The amendment proposed by D66 and SP to set the interest rate for loan system students to zero was supported by GroenLinks, PvdA, Volt, Denk, the PvdD and Bij1. The initiators wanted to fund their proposal by increasing the sales tax on flowers and plants and on drinking water for bulk consumers. This was to yield 500 million per annum.
Chair Demi Janssen of the ISO (Interstedelijk Studenten Overleg) is disappointed that the zero per cent proposal didn’t make it. ‘It is important now to ensure that students are not left in the cold and are provided with financial security’. ISO is of the opinion that freezing the interest rate must be achieved, even if additional cover is required.
