Majority back plan to abolish student loans in favor of grants

Student loan application
Student loan application Photo: karenr/DepositPhotos

The PvdA also wants to get rid of the student loan system and reintroduce the basic study grant, joining the call of Coalitie-Y - an initiative of the ChristenUnie and youth organization who want to take measures to give more certainty to the next generation of young people. A vast majority in parliament now supports this plan, NU.nl reports.

According to Coalitie-Y, there is too much pressure on young people due to, among other things, the lack of affordable housing on the Dutch housing market and the increasing pressure of study debt. Social and economic council SER said last week that millennials are achieving milestones later and later, also blaming it on the combination of study debt, fewer permanent contracts on the labor market, and the situation on the housing market. 

PvdA leader Lodewijk Asscher wants a new basic study grant for children whose parents earn up to around 100 thousand euros a year, he said to newspaper AD. "A much larger group would then qualify for the supplementary grant", he said. He wants to create more certainty for young people. "You can now see that young people get a bucket full of uncertainty. They are already dealing with less job security, with housing shortage, and then it is too much for some young people to also have to borrow money."

The student loan system replaced the basic grant in 2015. The previous coalition of VVD and PvdA, with then opposition parties D66 and GroenLinks, were the architects of this system. The idea was that the baker would no pay for the lawyer's studies, and money saved in this way would be invested in higher education, according to NU.nl. That promise has not been fully met. GroenLinks already turned against the system, and with Asscher and the PvdA following suit, a vast majority in parliament now wants to abolish the loan system. 

But that doesn't mean that things will change immediately. Abolishing the student loan system will cost a lot of money and will also mean that some students will end up paying much for for their studies than others. Whether and how this group will be compensated will have to be worked out. GroenLinks and PvdA's move to the other side of the argument can mainly be considered as a commitment for the forming of the next government, after the 2021 parliamentary election.

Minister Ingrid van Engelshoven of Education, Culture and Science said that she will examine the student loan system. If it indeed turns out that the system poses "a major obstacle" for some students, then the cabinet will "look at possible adjustments". The evaluation should be done by next summer. 

It is unlikely that the Rutte III coalition of VVD, CDA, D66 and ChristenUnie will still make any changes to the student loan system. Their coalition agreement stated that it will remain in place. And the evaluation will be done less than a year before the next parliamentary election is held. 

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