EM Explains: exactly how unlucky was the unlucky generation?

Next year the student loan system that has been in force in the last few years will be abolished, but that won’t be the end of the students’ misery. Students from all over the country are protesting. In the words of the Rotterdam-based Studentenprotest action group: ‘Compensation in the amount of 1,000 euros is nowhere near enough if your student loan debt amounts to 50,000 euros.’ Students are angry because they won’t be given proper compensation for missing out on student grants, but are they right to be angry?

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To determine that, you must analyse what has changed in recent years. Until 2015, all Dutch students received a monthly student grant worth up to €286. This student grant was abolished in 2015, for three reasons.

Lawyer’s son

Firstly, the Dutch Labour Party (PvdA) believed that it was unfair that all Dutch taxpayers had to contribute to student grants – that the baker’s taxes would go towards a student grant awarded to a lawyer’s son. The party felt that university students were more likely to get a good job than your average person and therefore more likely to be able to repay the amount they owed, and so the party proposed that student grants be abolished. Other political parties agreed.

Secondly, the Dutch Liberal Party (VVD) proposed that under the new student loan system, students be able to decide for themselves how much they would borrow and what kind of degree they would get. This would enable students to make a more conscious decision as to their choice of degree. A study conducted by the Erasmus School of Economics showed that during the years in which the student loan system was in force, female students in particular were less likely to opt for degree programmes that trained people to work in nursing, education and the social field. In other words, these students did make a more conscious decision, but those decisions did not necessarily benefit society. After all, we do need nurses and educators.

Thirdly, there was another major argument – promises. The government promised that the €1 billion it would save by not paying student grants would be invested in improvements to the education sector. Those promises were never realised.

Debts twice as high

A comparison of student grants and student loans shows that students who got a degree during the student loan years missed out on at least €13,000. At the same time, their debts are twice as high, with a quarter of them owing approximately €40,000. Now add the fact that student housing and tuition fees have become more expensive and you will see that students have had a harder time of it in recent years. At the same time, students from less well-off families have missed out on a disproportionately large amount, despite the fact that supplementary grants were not abolished. Therefore, offering them compensation in the amount of €1,000 is a little ungenerous.