Students protest against the loan system. Photo taken in May 2021 by Rob Nelisse

Current students to benefit a little from new basic grant after all

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The Netherlands is set to reintroduce the so-called basic student grant from September 2023, doing away with the student loan system. Are you still enrolled in the university and do you expect to graduate on time? In that case, you will benefit from the forthcoming grant too, according to plans recently announced by the Dutch Minister of Education, Robbert Dijkgraaf.

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If the cabinet gets its way, higher education students living with their parents will soon receive a basic grant of 91 euros a month. Students living away from home will be entitled to 255 euros. 

What's more, the basic grant will not only be available to new students, “but also to those who have already started their studies”. However, to qualify, they must be on schedule to graduate on time.

For example, a student who enrolled in a four-year programme this year will be entitled to a basic grant for two years, starting from September 2023. The aim is to ensure a smooth transition between the old system and the new. Once this person graduates, in a few years’ time, they can also expect to receive an allowance for the time they studied without a basic student grant (see below).

Repayment
Minister Dijkgraaf has shared his considerations with the House of Representatives, outlining some of the dilemmas surrounding the new basic grant. The budget is limited to one billion euros per year and that amount has to cover all the measures and changes he plans to introduce.

One of the proposals is that student financing will be similar for students enrolled in universities of applied sciences and those studying in research universities such as UU. Currently, students in the universities of applied sciences have to pay back their loans in 15 years, while university students have 35 years to do the same. Giving the former more time to repay will cost the Dutch government 8 million euros a year, which will lower the basic grant for research university students by 2 euros a month.

Additional student grant
But there is another grant: the additional student grant, which depends on how much a student's parents earn and how many siblings they have. This grant will remain at a maximum of 419 euros per month, as is the case in the current loan system. Students whose parents earn less than 34,600 euros a year are entitled to the full amount, while those whose income is below 53,900 euros are entitled to a partial grant.

Although the minister could raise the limit for the additional student grant to 70,000 euros, he would rather not, as that would cost about 108 million euros each year, which would have to be compensated by reducing the basic student grant by 20 euros a month. Middle-income families will benefit from the reintroduction of the basic grant anyway, the minister argues.

 

Surprisingly, there are students who do not apply for an additional student grant even though they are entitled to it. Of those, 41 percent have taken out a student loan, which means they do need the money and are missing out on it. The minister hopes to address this issue by providing additional information to students. But that, too, will cost money.

His preference
Ultimately, Dijkgraaf would like to use the budget of one billion euros to finance a basic student grant, plus some additional measures. But what if the House of Representatives prefers otherwise? The minister has set out three alternatives in a chart, detailing how they will affect the basic grant by a few tens more or less per month.

basicgrant.pngConcession for students who just miss out
But what about the cohort of students who do not benefit from the new loan system? The minister plans to give anyone who has studied for at least one year under the loan system without a basic student grant an allowance of 359 euros per year, up to a maximum of 1,436 euros (the equivalent of four academic years). However, to qualify you have to make sure to complete your degree within ten years.

The first four cohorts (2015-2019) under the student loan system were also due to receive a study voucher worth 2,150 euros to spend on additional education. The coalition parties initially wanted to amend that plan in favour of letting students choose between additional education or a reduction in their student debt.

But the complexity of realising this option has led the government to abandon the voucher scheme and go for a student debt reduction instead. Debt-free students will have the money credited directly to their bank accounts from 2025. However, this change has resulted in a lower amount.

The previous government had set aside 600 million euros for the voucher scheme in the knowledge that not all students would end up making use of the vouchers. Many graduates have no desire to pursue additional education, after all. But a pay-out is bound to appeal to all students and, with that in mind, the amount available has been lowered to 1,770 euros.

If the House of Representatives agrees, the first four cohorts of students who missed out on the grant can expect to receive up to 3,206 euros.

What about next year?
Many young people may decide to take a gap year from September 2022 in order to receive the maximum benefit of the grant when they return. This could lead to a reduced number of students enrolling next academic year. But minister Dijkgraaf has anticipated this possibility too: some extra funds from the allowance pot could be reserved for these new students. However, he went on to warn that this would be “at the expense of a large part of the budget for students from other years, given that the total budget remains set at one billion euros.”

Disappointment
The initial response by the Dutch National Students’ Association (ISO) is one of disappointment. On the basic student grant, president Lisanne de Roos says: “An amount of 91 euros for students living with their parents isn’t even enough to cover the tuition fees, and a grant of 255 euros for those living away from home only leaves 44 euros a month to spend on groceries or rent once tuition has been paid for. Students will certainly benefit financially, but the proposed basic grant will do nothing to alleviate their problems and concerns. The notion that we could look forward to a fully-fledged basic grant has turned out to be a miscalculation.”

She also finds it odd that students who were due to receive 2,150 euros under a voucher scheme will now have to make do with 1,770 euros – hundreds of euros less – because everyone is expected to make use of the cash allowance scheme. ISO insists that the compensation available to students who missed out on the grant is much too low anyway.

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