The Education Executive Agency DUO revealed these figures today. In response to intense media interest in this ‘interest-rate trick’ and other developments in student financing, DUO decided to carry out a brief analysis.

The interest rate on student debt has risen above zero for the first time in years and currently stands at 0.46 percent. As this trend is expected to continue, students could find themselves facing thousands of euros in additional costs.

Splitting the debt

A number of smart students discovered that there was an advantage to be gained from ‘splitting’ their student debt. By halting their student loan from 1 January, they could freeze the interest rate on their current student debt at 0.46 percent for a five-year period. They could then restart their student financing from 1 February.

No fewer than 26,000 students decided this was worth doing. This figure is four percent of the total number with student loans at higher education institutions in the Netherlands. In previous years, hardly any students halted their financing in this way.

Historically, higher interest rates are far from unusual. In 1992, interest rates even exceeded 11 percent.

Basic student grant

In addition, an estimated nine thousand students had their student loans temporarily discontinued from 1 January, ahead of the reintroduction of the basic student grant in September. By doing so, they are ‘shelving’ their entitlement to student financing to reclaim it again from September, in combination with the basic student grant.

This figure is an estimate: students are always able to stop their student loans on 1 January and don’t have to provide a reason, but this year the figure is around nine thousand higher than normal.

This option is still open to students who have only just heard about it. They can pause their student loan from 1 April, for example, which would entitle them to a few months of basic student grant.

However, this only applies to students who are still entitled to the ‘performance-related grant’ for completing their higher education programme within the official time frame. In most cases, this is four years (unless you are taking a longer Master’s programme). There are a few more complications besides, as DUO explains on its website.

DUO estimates that 303,000 students from the loan system will be entitled to the basic student grant next year. However, their entitlement will cover a shorter period than first-time students who begin their programme in September.

Less borrowing

Are all these reports on student debt having an impact in other ways? This may well be the case: DUO has noted a steady decrease in the number of students who take out a loan. The total of 325,000 in the academic year 2019/2020 has dropped to only 270,000 in 2022/2023. This is a striking development, given that the number of students entitled to student financing has actually increased in recent years.

Another interesting trend is the increase in students applying for the supplementary grant. This is good news, as previously many students failed to claim these grants despite being entitled to them. In 2019/2020, 52 percent of students applied for the supplementary grant and in the current academic year this has risen to 72 percent.

DUO is now more active in informing students about the grant. It is worth noting that applying is not the same as receiving: DUO first has to check whether you are entitled to the extra support, in consultation with the tax authorities. The supplementary grant is intended for students whose parents’ income is relatively low. As with the basic student grant, you only get to keep the supplementary grant if you complete your degree within ten years. Otherwise, the sum is converted into a loan that you have to pay back in full.


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