Student loan interest rate increase expected to fail in Senate; Debate leads to GroenLinks in-fighting

Student loan application
Student loan application . (Photo: karenr/DepositPhotos)

The government's plan to increase interest rates on student loans will almost certainly fail in the Eerste Kamer, the Dutch Senate. Former VVD Senator Anne-Wil Duthler is increasingly critical of the plan, and support from the D66 also seems to be crumbling, NOS reports. The student loan system is also causing friction within GroenLinks. 

The coalition of VVD, CDA, D66 and ChristenUnie initially had a majority in the Eerste Kamer. But that changed when the VVD faction expelled Duthler a few weeks ago. She is now in the Senate as a one-woman faction and at this stage one person could swing the vote either way. 

During a debate on this proposal, the former VVD Senator said that she is not convinced by the interest rate increase proposed by Minister Ingrid van Engelshoven of Education. "It is not very likely that new answers will convince me", Duthler said in the Eerste Kamer. 

The D66 faction, Van Engelshoven's own party, also has some doubts. On Monday D66 senator Alexander Rinnooy Kan expressed concern about the increasing stress among students. He fears that the higher interest rate on study loans will jeopardize the accessibility of higher education. 

The legislative proposal, which has already been accepted by Dutch parliament, links the interest on student loans to the interest paid by the government on government loans with a 10 year term. Now that interest is linked to government loans with a 5 year term. Interest on 10 year terms is higher due to the longer term. This is expected to result in 5,500 euros more debt for the average student.

Minister Van Engelshoven considers the measure defensible, because the higher debt will ultimately be paid by "well-earning and highly educated people", according to NOS. It has also been agreed that former students will repay their debt monthly according to their means and that any outstanding debt will be scrapped after 35 years. 

At the end of the debate in the Eerste Kamer on Tuesday, the Minister noted that her bill will get "not much support", She will discuss with the Council of Ministers how to proceed, she said.

Over the past weeks student clubs and unions and youth organizations held an aggressive campaign to convince Senators to vote against this bill. With a petition and an open letter, they tried to make clear that increasing the interest rate on study loans will jeopardize the accessibility and affordability of higher education. Tom van den Brink of student organization ISO is pleased with the result. He didn't expect that the Minister will already take the proposal back to the Council of Ministers, he said to NPO Radio 1. "But the fact that it was pulled from the vote shows that the Eerste Kamer in no way will give its vote to the legislative proposal."

The study loan system also seems to be causing some conflict in GroenLinks, which helped to put the system into place. GroenLinks parliamentarian Zihni Ozdil was asked to leave the Tweede Kamer, the lower house of Dutch parliament. On Facebook Ozdil said that he left because his different view on the loan system led to a breach of confidence in the party.

GroenLinks leader Jessy Klaver disputes this, saying that there was no substantive disagreement. In an email to GroenLinks followers, Klaver wrote that there was a problem in the way Ozdil was functioning in his post as MP, Het Parool reports. Ozdil showed "unacceptable behavior" that made his colleagues "no longer feel safe" and did not honor agreements. Klaver also accused Ozdil of "secretly recording a conversation". The 13 other members of the GroenLinsks parliamentary faction revoked their confidence in Ozdil. 

Two weeks ago Ozdil turned against the student loan system during an interview with Trouw. He thereby publicly turned against the then-current party line, without discussing it with the party before hand. This forced party leader Klaver to also distance himself from the current loan system a few days later, according to Het Parool. 

"What an awful evening. For GroenLinks. For the faction. For Zihni", Klaver said on Twitter after Ozdil left parliament. "I feel terrible that it turned out to be unsolvable." Ozdil returned his parliamentary seat to GroenLinks. The seat "belongs to the party to whom I owe a lot", he said. Klaver expressed appreciation for this. 

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