Students fear an increase in interest rates for student loans

In recent years, the interest on student loans was 0% due to a favourable economic climate. However, this year the scenario may change due to the rise in other interest rates. This can cost students a lot of money, according to Het Parool newspaper.

This feels like a step back from a study period characterized by setbacks and broken promises, writes master’s student Harold Janssen in FD newspaper. The interest on Dutch government bonds – which serves as a benchmark for the interest on student debt – was negative, but that has changed due to the current economic situation and rising inflation.

The payback interest rates for student loans are determined every year for a period of five years. For example, those who graduated in 2017 found out what their interest rate was at the end of that year: 0%. This rate came into effect in January of 2018 and lasted until the end of 2022. However, the rate that will be in force from January 2023 is expected to be much higher. Since the interest on student debt is fixed for five years, any interest rate increase will initially only affect students who graduated in 2017 or 2022. For someone who graduated in 2018, for example, the interest is fixed until the end of 2023.

The Dutch national students’ association ISO is concerned about the feared rise in interest rates. “This is another financial slap for students. After the empty promise about not counting student debt in mortgage applications, it now appears that students may have to pay hundreds of euros per year in interest.”

The Ministry of Education says it understands students’ concerns about rising costs, but also calls it ‘conceivable’ that the interest debt will rise. “It’s important to realize that the recent period of historically low interest rates was truly unique. Moreover, lenient repayment conditions still apply to student debts: those who earn little pay nothing, and what you repay remains dependent on your income.”

How much will students pay? If the interest rate would become 1,5%, with the average student debt standing at €15,200, former students would have to pay back an extra €228 in interest per year. However, many students have a much higher debt, especially those who did not live with their parents during their course. The annual interest on a debt of €50,000, which is not an unusual amount of debt, can rise to €750 per year.

FD reports this increase is manageable, especially given the good income that many students can expect after graduation. It is, however, another setback in a long line of financial disappointments for this generation. These are the students who did not receive a basic grant as a gift, but had to pay back their entire grant – a policy that was in place for seven years but will be reversed soon. Furthermore, they who will no longer profit from the promised increase in the quality of education. And finally, they have received online education for two years and may have suffered from study delays as a result.

Perspective It’s important to remember that the opportunity to study at a good educational institution, with a loan with a low interest rate, is still a good deal compared to many other countries, according to FD. Also, being able to borrow money so cheaply is a major plus. The current tight labour market also means that students can expect a good job after graduating.

In June, the House of Representatives will vote on a motion to freeze tuition fees for 2023-2024. The ISO hopes for a majority, so that at least one cost item does not rise further.

Written by Raphael Vieira

Government chalks out a comprehensive master plan to improve elementary school skills

In recent years, the Covid crisis, teacher shortages and various other factors have had an adverse effect on elementary education in the Netherlands. It has been observed that many pupils finish primary school while lacking at basic skills such as reading, writing, math, digital literacy, and interacting with each other in a rapidly changing world. Furthermore, primary teachers’ educational skills are not up to the desired standard. Acting on these serious concerns, the government has devised a comprehensive plan for the next ten years to get the basics in order and improve the quality of education.

The proposed plan focuses on providing ample time and space to train teachers as well as steps to improve students’ basic skills. Primary teachers in association with education experts will provide knowledge, extra hands and help at school. Extra hands are set to be recruited in order to help about 150 primary and secondary schools to strengthen the basic skills of tens of thousands of students. In addition to this, 350 schools can apply for a subsidy to improve basic skills themselves. This will reduce the administration load for teachers, so they can primarily focus on teaching. Furthermore, teachers will be armed with more didactic and subjectspecific knowledge, so they will enjoy their work more.

All these ideas are the highlights of the first draft of the plan, presented by the education minister Dennis Wiersma. Now the minister is in talks with teachers, school leaders, administrators, teacher training experts and other parties from the education sector to set out the details of the plan.

As the main causes for the problems, the minister highlighted the outdated and unstructured curriculum, an overloaded program, scarcity of manpower and a gap between educational science and practice. The list does not end here: trends such as digital entertainment, pupils who read and write less during their free time, and a decrease in the number of libraries are further culprits for the students’ lack of basic skills.

The plan also aims to improve teachers’ ability to teach various disciplines. For example, they must be given extra time to acquire knowledge and resources that they can apply in practice. Furthermore, all schools must use effective teaching methods, as identified in the most recent scientific research. The government is all set to provide support to give pupils a brighter future. Minister Wiersma also emphasized that it is not just about schools, but that all involved parties, such as parents, culture institutions, childcare and libraries, should come forward to improve pupils’ basic skills.

The education inspectorate will monitor whether the schools are taking the steps that are expected of them. Schools with lax approaches will be scrutinized and a stricter enforcement policy will be adopted to deal with unprofessionalism. According to the government, a coherent, long-term study will assess the improvement and development of education as a whole. The outcomes of the study will help the government to determine the development of basic skills, deficiencies in various areas and possible solutions to combat these deficiencies. This program will not only help to develop effective supervision at the school level, but bring fruitful changes to the entire Dutch education system.

The obvious question that arises in everyone’s mind is – when will we see the effects? Experts say we should not expect success overnight. It will take lots of hard work, the right attitude and continuous efforts to achieve the desired results.