Interest on student loans is the ‘latest blow’ to new graduates
Student organisations are furious about a potential increase in the interest on loans students who graduate this year are likely to have to pay.
The interest rate on student loans, based on the interest on state bonds, is agreed each year for a period of five years and covers the students who graduate that summer.
Recent graduates have to pay zero interest because of the record low rates, but this year’s graduates may be faced with a rate of 1.5%, according to calculations by the Financieele Dagblad.
Student union ISO said the prospective increase is ‘the latest financial blow for students’.
‘After the empty promises about student debt not being included in mortgage requests and the measly compensation for students who had no grants, students will now have to pay hundreds of euros a year in interest,’ chairwoman Lisanne de Roos said. ‘Bu the time students have paid off their debts, it will run into thousands.’
The ISO also condemned government communications about the rise. ‘Very many students have no idea that the interest on their student loans can go up,’ De Roos said.
The education ministry told the AD in a statement that students could have predicted interest rates will rise. However, students with very low incomes do not have to pay back their debts at all and others pay according to their income, the ministry pointed out.
The government has pledged to bring back student grants, which were abolished in 2015, a move which has seen student debt soar. Since then, students have had to borrow to fund their degree courses, and run up an average debt of around €25,000 by the time they graduate.
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