Cabinet to increase student loan interest

The cabinet is planning to increase the interest rate on student loans by one third to 3.7%, the Volkskrant reports on Monday morning. The plan is included in a memo sent by the cabinet to parliament at the beginning of last week. The paper says the press release which accompanied the memo spoke only of ‘improvements’ in the rules governing student loans.

However, the paper says, the memo makes it clear that the interest rate on student loans will go up to cover the cost of the improvements – put at €35m. These improvements will make it easier to borrow, give students more flexibility to pay back loans and allow them to use loans to pay for classes abroad.
The higher interest rate will only apply to new borrowers. Around 25% of students borrow from the IB-Groep which manages the loans. The government is keen to get more students to use loans because of concerns that they spend too much time doing part-time jobs.

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