Interest on study debt stays roughly the same

DUO will inform students of the new percentage this month, but it can already be calculated. Based on interest rates in the past year, it will be 2.6 percent. The interest on study debts is linked to the interest the Dutch state pays on five-year loans. The average is determined based on the year from October to October.

For years, the state actually received money, so the interest was negative. For students, this meant zero percent interest. In 2023, this became 0.46 percent and this calendar year, the rate jumped to 2.56 percent. This caused dismay among students who assumed that borrowing money from the government was free.

11 percent
Many years ago, interest rates were even higher. In 2008, for example, the rate was over four percent. In the nineties, loans were very expensive, with interest rates between six and ten percent. In 1992, it surpassed 11 percent.

The official calculation for next year isn’t yet known and can therefore deviate slightly from this forecast. The ministry looks at state loans with a term between 4.5 and 5.5 years. DUO is expected to announce the rate next week.

Accumulating
The interest already starts accumulating during someone's studies. If a student takes out a loan of 10,000 euros this year and doesn’t borrow anything extra, this study debt will have increased by 256 euros one year later.

After completing their education, students get a two-year "grace period" before starting their repayments in January. In principle, they can take 35 years to pay off the entire loan, plus five years of pause if they so desire. This used to be fifteen years.

The interest rate can increase considerably. Let’s say you pay off a debt of 10,000 euros in 35 years at an interest of 2.56 percent. This means you’ll pay over 5,000 euros worth of interest. Your monthly repayment will be 36 euros. At zero percent interest, this would be 24 euros.

Calculation tool
DUO has a calculation tool on its website and has improved information provision about interest. For those making repayments, the interest is fixed for five-year periods. In other words, if you started making repayments in 2023, you still have an interest of 0.46 percent and it will stay that way until January 2028.

DUO takes your income into account. If you don’t earn a lot, you don’t have to pay back as much. If your annual income is 30,000 euros, you won’t pay more than 26 euros a month and the rest will be waived. Please note: your partner’s income does count towards the total.

Court case
Outraged students wanted to launch a court case over the rise in interest rates last year. They claimed that DUO didn’t provide correct information. Ultimately, the case was never brought forward.