According to the latest figures from Statistics Netherlands (CBS), nearly 460,000 students are currently building up a student debt. These are students taking out loans in addition to their basic grant and (sometimes) supplementary grant.
That number is lower than during the peak year of 2021, when 657,000 students in secondary vocational education, universities of applied sciences and research universities had a student debt. However, the number of former students with debts continues to grow – now standing at 1.1 million.
Average debt on the rise
Still, the average student debt continues to rise. It now stands at over 18,000 euros. The sharp increase didn’t happen right away in 2015 when the new loan system was introduced, as the basic grant was only abolished for new students. So it took a while before the impact became visible.
In September 2023, the basic grant was reintroduced. Its effects will also become more apparent in the years ahead.
Almost half of all students have debts under 10,000 euros. Another 29 percent owe no more than 20,000 euros. Still, many people have higher student debts: 13 percent have to repay between 30,000 and 50,000 euros, and another 9 percent owe even more.
‘Inequality is growing’
It’s a positive development that fewer students need to borrow, says Sarah Evink, chair of the Dutch National Students’ Association (ISO). But she believes the figures also show that inequality among students is increasing, and that worries her. “It’s distressing that so many people have a student debt of over 50,000 euros.” She fears that high debts will discourage young people from pursuing further studies.
Students are allowed to spread their student loan repayments over 35 years, plus five optional years during which they can pause repayments. They repay based on their income – those with low incomes have a capped monthly repayment. After 35 years, any remaining debt is written off. For years, the interest rate was 0 percent, but it has since increased.
Mortgage
Given the relatively favourable conditions, some students may be borrowing the maximum amount and using the money when they want to buy a house. This allows them to take out a smaller mortgage with the bank. It is not known how many students actually do this.
Usually, the debate focuses on the opposite issue: because of their high student debts – which count when applying for a mortgage – students often struggle to buy a home. Politics, meanwhile, makes it easier to hide student debts when buying a house, despite calls from various organisations not to allow this.
