Repercussions of a Dutch study tax

Nieuws | de redactie

23 april 2012 | Students at Dutch universities will have to finance their studies through loans instead of grants in the future. In Great Britain and United States this policy has a long tradition. What will be the consequences of the Anglo-Americanization of Dutch higher education funding?

The Dutch government plans to replace the current study grantsystem by loan facilities. Right now, all Dutch and some EU citizens are entitled to a monthlygrant of around €266 if they attend university. In the future,students will have to finance their studies by borrowing money fromthe government. This represents a major policy turnaround shiftingthe burden of higher education financing from the public sector tothe individual student.

From student loans to tuition fee hikes

Abroad, similar reforms were implemented in the past with wideranging consequences. Ever since taking office in 2010, BritishPrime Minister David Cameron has been driving his conservative liberal coalition in asimilar direction by introducing a “study tax” and widening loanfacilities. For English students this means that from 2012 on theyhave to pay yearly tuition fees of up to £9.000 (€10,170).

The European Commission too has recently found a liking in theloan idea. Plans are being worked out to ready a fund worth €100million from which EU citizens can borrow money to complete aMaster education abroad. Allan Päll, leader of the European StudentUnion (ESU), criticized these plans stating that they would create”tomorrow’s indebted generation of graduates”.

“We need to admit that rising youth unemployment and anincreasing graduate debt burden might become an explosive mix,leading to greater social divisions between young and old,” Pällcommented in an opinion article.

Champion of student loans worldwide are the United States.There, the total amount of student loans outstanding has recentlysurpassed the $1 trillion mark. Last year,experts from the rating agency Moody’s already warned that thestudent loan market might be the next financial bubble to burst. President BarackObama himself addressed this issue in his State of the Unionspeech. At the moment, he is fighting off Republican efforts to double student loan interest rates.