Nibud: basic grant insufficient for parents who earn around 1.5 times the modal income

The National Institute for Family Finance Information (Nibud) is arguing that while the revived basic student grant will be a help to students, they are at risk of being severely affected by the high rate of inflation. And because they already spend very little, there are few areas in which they can make savings. Parents who earn around 1.5 times the modal income are unlikely to be able to afford the parental contribution to their children’s study costs.

These are the conclusions in a Nibud report on the new basic student grant and the expenditure of students and their parents. It appears to suggest that the rate of inflation may render all calculations obsolete.

The report claims that students who live at home should no longer need to get into debt. In fact, they would not even need to take on a job on the side. Students who live away from home should be able to absorb the additional cost (255 euros), thanks to their higher basic student grant and any income from jobs on the side.

Inflation

But this does not take into account inflation, which adds significantly to expenditure. Students will therefore have to ‘work considerable hours’ on the side, earn more or borrow more. They have little opportunity to make savings.

Students may hold out some hope for financial support from their parents, but for parents who jointly earn 1.5 times the modal income (3,843 euros net per month) the parental contribution is a serious amount of money. To be able to afford this contribution, Nibud believes that they must be ‘highly financially literate, apply for every possible type of income support and have no unavoidable personal expenses’.

Nibud adds that this is not realistic for all households. In any case, households will need to make considerable savings in order to afford the parental contribution. “Whether this is tenable is open to question, given that they are affected by the current high rate of inflation as well.”

Tempered

This has led Nibud to an inescapable conclusion with regard to the new basic student grant: students will obviously need to borrow less, those living at home will be 5,275 euros better off and those living away from home will save 13,147 euros, but: “these positive consequences are likely to be tempered by high inflation”.