Students will be told the new percentage by DUO this month, but it can already be calculated. Based on the interest rates of the past year, we arrive at 2.6 percent.
The interest rate on student loans is linked to the interest rate paid by the Dutch state on five-year loans. The average is determined over the year from October to October.
For years, the state received money: interest rates were negative. For students, that meant zero percent interest. In 2023, it became 0.46 percent, and this calendar year, the rate jumped up to 2.56 percent. That led to dismay among students who thought borrowing was free.
There were years with higher interest rates. In 2008, for example, the rate was more than four percent. In the 1990s, loans were very expensive with interest rates between six and ten percent, and in 1992 even more than 11 percent.
The official calculation for next year is not yet known and may therefore differ slightly. The ministry is looking at government bonds with a maturity between 4.5 and 5.5 years. DUO is expected to announce the rate next week.
During training
The interest on student debts already accrues during the programme. If someone has a loan of 10 thousand euros this year and does not borrow anything else, this student debt will have risen by 256 euros a year later.
After their training, students are given a two-year interest-free 'run-up' and then they will start repaying in January. In principle, they can take 35 years to do so, plus five break years if they wish. It used to be fifteen years.
The interest amount can be quite high. Suppose you repay a debt of 10 thousand euros in 35 years at an interest rate of 2.56 percent, then you pay more than 5 thousand euros in interest. It is about 36 euros per month. At an interest rate of zero percent, that would be 24 euros.
DUO has a calculation tool online and has improved information about interest rates. For repayers, the interest rate is fixed for five years at a time. Those who started repaying in 2023 will therefore still have an interest rate of 0.46 percent and will remain so until January 2028.
DUO takes income into account. If you earn little, you pay back less. With an annual income of 30 thousand euros, you pay no more than 26 euros per month and the rest is waived. Please note that your partner's income counts.
Lawsuit
Outraged students wanted to file a lawsuit last year over the interest rate hike. The idea was that DUO would not have provided proper information. But nothing more has been heard of that lawsuit.
