Loan system made students more financially dependent on parents

Students in the Netherlands became more financially dependent on their parents over the past few years, and that is partly due to the introduction of the student loan system, budget institute Nibud concluded after a four-year-long study among over 1,500 students. Students are now also more likely to keep living with their parents, AD reports.

Over two thirds of the surveyed students receive money from their parents, an amount of 211 euros per month on average. In 2017, that amount was still 165 euros. Parents are also increasingly paying for their children's insurance and study material. This could lead to increasing inequality, Nibud warned.

Especially students from middle class homes are more often struggling because their parents can't contribute as much as higher income families, and the students don't qualify for the same social support as those from lower income families. This results in middle class students either having to borrow more, or work more. And that can result in them starting their working life with a financial backlog, Nibud said.

The loan system replaced the basic study grant in 2015. In the years since then, students have come to see a student loan as less of an investment. Nearly two thirds of students now have a student loan. Almost half of them have debt of more than 10 thousand euros. More than half of the surveyed students are worried about their debts, for example about the consequences it will have on them buying a house, Nibud found.

"We want to stay away from the question of whether the loan system should therefore go away, that is ultimately up to politicians. But we do see vulnerabilities and if you want the system to be fair, you have to do something about it," Nibud director Arjan Vliegenhart said to AD.

Student associations LSVb and FNV Young and United are not surprised by Nibud's findings that most students need money from their parents to get by. "Students have been burdened by the loan system for years. Even if you work 12 hours a week, you won't be able to make ends meet. As a result, you start your working life with a sky-high student debt," LSVb chairperson Ama Boahene said in a press release.

The associations have been calling for the loan system to be scrapped, and the basic study grant re-introduced, for years. Students should be able to graduate debt-free, they believe. "For the first time we see a generation that is largely dependent on a social safety net, such as parents, in order not to be saddled with sky-high student debt. For their future, but also for that of our society, we must be willing to invest," Alina Danii Bijl of FNV Young & United said.