Student loan interest should be forgiven for students who missed basic grant: SP & D66

The D66 and SP want to set the interest on student loans at 0 percent for the “unlucky generation” of students who fell under the loan system. To pay for the measure, which will cost about 500 million euros, the parties suggest increasing the VAT on flowers and plants, AD reports.

The interest on student loans will increase from 0.46 percent to 2.56 percent on January 1, resulting in students sometimes having to pay thousands of euros more on their student debts. The student union LSVb will protest at the Tweede Kamer, the lower house of the Dutch parliament, against the increase on Wednesday.

The D66 and SP want to scrap interest on student loans altogether for the unlucky generation - the students who studied between 2015, when the government scrapped the basic study grant in favor of the student loan system, and 2023, when the government reintroduced the basic grant.

To pay for the measure, the parties want to scrap the VAT benefit that’s applied to floriculture since 1975. The decorative plants and flowers sector can bear to move from the low VAT rate of 9 percent to the regular VAT rate of 21 percent in favor of a generation of students who caught bad break after bad break, the parties believe.

“The unlucky generation is already the victim of a very expensive political experiment. Now that they can no longer do anything about the amount of their student loan, they are confronted with a much higher repayment,” SP parliamentarian Peter Kwint told AD. According to him, absorbing the interest rate is “the least we can do.”

Students face ever-growing pressure, D66 MP Jan Paternotte said, pointing to “price increases, performance stress, and a huge shortage of student housing.” Fixing the interest rate at 0 percent will give students certainty. “It does not solve all challenges in one fell swoop, but it will give this generation more breathing space.”