MPs are set to vote on a motion on Thursday evening which will slash the scope of the 30% ruling from next year – and use the proceeds to cut the interest rate that students have to pay on their loans.

The motion was drawn up by independent MP Pieter Omtzigt, who said the interest rate cut could be paid for by reducing the tax break that is granted to a limited number of international workers. 

The interest rate on loans to students who graduated five years ago is about to go up from 0.46% to 2.46%, and that has led to demonstrations and calls for action from students and politicians. 

According to NOS, a majority of MPs are likely to vote in favour of the plan.

People who meet stiff qualifications and are posted to the Netherlands from abroad can currently benefit from the tax break for up to five years. Omzigt wants to cut this from January to 30% for 20 months, 20% for 20 months and 10% for a further 20 months. 

Omzigt, currently ahead in the polls, has included phasing out the benefit in the manifesto for Nieuw Sociaal Contract, the party he has recently formed to fight the November general election. 

Omzigt blames the 30% ruling for the current problems on the Amsterdam housing market, saying it enables foreign workers to inflate house prices in the rental and owner-occupier market. 

Student grants have been reinstated for the current academic year, eight years after the government replaced them with loans.

Existing students who have financed part of their courses themselves will have up to €1,436 reimbursed by the government, while former students will have their debt reduced by €1,802 or be compensated if the loan has been paid off.

Reducing the scope of the ruling will save €3 million in 2025, rising to €194 million a year by 2029.

“The government is requested to use this budget to reduce the interest rates on student loans paid by the “unlucky generation”, who studied without a grant,” the motion states.