Left-wing opposition critical of scrapping student loan interest cap, but D66 backs minister

Left-wing parties have reacted with indignation to the government’s decision to scrap its promised cap on interest on student loans. D66 is not happy about it either, but sees no alternative. “This is what we have to make do with.”

In the coalition agreement, D66, VVD and CDA agreed to cap interest on student loans: students would never pay more than 2.5 per cent interest. But the plan was suddenly scrapped last week. It turned out to be more expensive than expected.

The decision went down badly with student organisations. The Intercity Student Consultation (ISO) reacted with disappointment, while the National Student Union (LSVb) is furious. There is now criticism in politics too.

During Tuesday’s debate on the OCW budget, the left-wing parties were particularly critical. The government must keep its promises, says PRO MP Fatihya Abdi: “You can’t make promises and then say: oops, it’s not going to work.”

Sandra Beckerman (SP) also considers it unacceptable: “The government promised students that the rate would be capped at 2.5 per cent”, she says. “Now that it is becoming more expensive for the government, it says: we’re not doing that any more; we’re leaving students to foot the bill.”

Changed

But D66, which likes to present itself as an ‘education party’, backs its minister’s decision. Of course she would have preferred things to be different, Ilana Rooderkerk said during the debate: “I think it’s very unfortunate for students that this is happening now”.

But the world has changed, the D66 MP continued. “The minister has indicated that the measure set out in the agreement cannot be implemented. That is what we have to make do with.”

The coalition plan set aside 40 million euros for the interest cap. But the cap turned out to cost four times as much. On reflection, it was too expensive, too risky and “unwise”, education minister Letschert wrote last week.

Political choices

PRO MP Abdi does not understand how the coalition could have failed to anticipate the cost. “Surely the coalition didn’t make this decision without thinking it through?” SP MP Beckerman wonders why students have to bear the cost of rising interest rates: “Those are political choices we make”.

The Christian Union understands that an interest cap could become too expensive, but cannot understand why the proposal was included in the coalition agreement in the first place “if the coalition parties are not willing to provide extra funding”. Because, after all, “the world has changed.”

Increase student grant

It is easy to say all that in hindsight, Rooderkerk believes. “What we consider particularly important is that the money we have set aside for students – 40 million euros on a permanent basis – actually goes to students.”

She already has an idea: 30 million euros could be used to equalise the compensation for tuition and course fees for vocational students. The remaining 10 million euros could be added to the 110 million euros allocated to increase the grant for students living away from home.

The coalition had already promised to increase this grant by a few dozen euros. The increase was due to take effect in 2027, but a few months ago minister Letschert wrote that it had instead been postponed to 2028.

Cuts

Several parties are also concerned about the cuts facing education. Now that the cuts to social security are not going ahead, the government is looking for extra money. If it cannot find any, education may have to foot the bill.

Marjolein Moorman (PRO): “I understand that behind the scenes people are saying: no, there’s a deal, so that really isn’t going to happen. But we can still see it in the budget documents.” The matter was not discussed further on Tuesday. The budget debate will continue on Thursday, when the minister will speak.