Dutch students and graduates shed bitter tears these last two weeks. The interest rate on student loans to apply from 2024 has quintupled to over 2.5 per cent, culminating in repayment sums that are 45 per cent higher, De Volkskrant calculated. The generation that did not benefit from a basic grant (yours truly) is impacted the most. Had I not split my loan and fixed it at 0.46 per cent last year, my debt would have increased by an amount larger than the one-off compensation. Students responded with incredulity and disappointment to this new slap in the face.
In my column in 2022, I predicted an increase in interest rate to between two and three per cent in 2024. Reading the DUO fine print played a greater role in this prediction than my crystal ball. So, everyone could have seen this coming, even if you don’t read student columns in Resource.
Instead of informing me properly, I was soothed like a small child. I was astounded.
The incredulity and disappointment are partly due to students failing to inform themselves. But the mediocre communication by the government is to blame in equal part. An example: the old tool used for calculations on the DUO site was incomplete and, thus, misleading. I phoned DUO to share my constructive criticism. The criticism was ignored in an equally friendly manner. ‘You may worry, but you may strike it rich later! That is also a possibility’, the DUO official stated on the phone. Instead of informing me properly, I was soothed like a small child. I was astounded.
The new DUO repayment tool has been improved. Still, it fails to provide the user with insight into several key elements. For example, if DUO acknowledges your relationship as “partners”, this has a colossal impact on your statutory repayment amounts. In the case of two unlucky students who both have student debts, the repayment sums are doubled over the same income (a possible topic for another column). Moreover, the way your debt develops (does it increase? When does it decrease?) is unclear.
Another thing that is under-illuminated is that a considerable group of students will see its debt increase during 35 years, repay more than they owe, and remain in debt throughout these 35 years. A new prediction: there will be an outrage about this at the end of 2025.
You can try for yourself what circumstances (starting salary, interest rates and salary increase) may land you in that group using this tool I developed. The rabbit that pops out of the hat is that the basic grant may yet be given to the unlucky generation, even if you will only know this after 35 years. Try it!
