‘Increase in interest levied on student loans violates the law’

If the Senate agrees to the proposed increase in the interest levied on student loans, the Intercity Students’ Organisation (ISO) and the Student Legal Services office (LSR) may take legal action. They think it is unlawful that the education system will not profit from the income generated by the interest rate increase.

The Dutch Cabinet intends to increase the interest levied on student loans starting from 2020. According to the proposal, the interest rate will be linked to the 10-year interest levied on government bonds. Former students with an average-sized loan (€21,000) and an above-average income will pay €12 more interest per month, which will amount to €5,000 over the course of 35 years’ loan repayments. The plan is supposed to add an annual €226 million to the government’s coffers.

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According to ISO and LSR, the proposed measure violates the International Covenant on Economic, Social and Cultural Rights, to which the Netherlands is a signatory. The Covenant states that higher education must be accessible to everyone, courtesy of  “a progressive introduction of free education”.

Unlike the income generated by the student loan system, which is invested in the education system, the interest rate increase is designed to contribute to “dependable state finances”. “Neither the quality of our education system nor students will benefit from the interest rate increase,” says LSR President Brechje Keukens. “Which means filling the government’s coffers using students’ money is unlawful.”

Protest

Last week, student and adolescent organisations, in association with the GroenLinks political party, established a petition against the interest rate increase, which has by now been signed by nearly 100,000 people. Furthermore, students will take to the streets in Amsterdam on Tuesday to protest the proposal. They hope they will be able to convince the Senate to vote down the proposed interest rate increase.

They may actually stand a chance of doing so, since the coalition has the narrowest of majorities in the Senate: one seat. Not to mention the fact that the proposal has encountered some objections within the coalition. The D66 and CDA party conferences previously called on their senators to vote down the interest rate increase.

 

The Senate will discuss the proposal at the end of this month, and will vote on it on 4 June. If the Senate accepts the proposal, the student organisations will take legal steps.