Political deal to replace student grants with loans

After months of planning and negotiating, Jet Bussemaker, minister for education, culture and science in The Netherlands, has struck an agreement with two opposition parties on a bill that will convert student grants into loans from 1 January 2015. The move will free up €1 billion (US$1.4 billion) from the state higher education budget.

An estimated €200 million to €300 million a year will be allocated as grants to students whose families earn less than €46,000 a year. The rest, said Bussemaker, will be ploughed back into higher education to improve quality.

The Dutch National Union of Students and the European Students’ Union have condemned the move.

Today, Dutch students receive a monthly grant of €279 if they do not live at home and €100 if they live with their parents. On average, students work 11 hours a week over and above their studies, and have accumulated €15,000 in debt when they graduate.

Under the new system, the unions argue, students will accumulate greater debts or have to work more during their studies – and hence risk prolonging the time-to-degree.

Bussemaker’s argument for abolishing grants is the ‘private benefit’ one. On graduating, students will earn higher than the average salary of Dutch workers, and this is socially unjust.

Under the proposed new system, students will have to pay their study loans back once they start earning more than the minimum wage. The loan, which will have a fixed interest rate, will be due over 35 years.

Student view

Eduard Schmidt, vice chair of the Dutch National Union of Students or LSVb, told University World News: “Just days ago, the Dutch government decided to abolish student grants and turn them into student loans.

“The average debt of a student is currently around €15,000. By abolishing student grants, this will become around €30,000 per person!

“According to Dutch research, around 10% of future students will decide not to start [higher education]studies. This is unacceptable because every student has the right to study.”

The European Students' Union , or ESU – which represents 47 national student unions in Europe – adopted the following resolution at its annual meeting in Vienna in May:

“ESU supports LSVb in its struggle for accessible higher education. ESU believes that everyone who in one way or another has proven their capacity to enrol in higher education should be able to do so. The accessibility of higher education is vital to make sure that everybody can develop themselves to the best of their abilities.”

ESU said the “continuous introduction of selective admissions” in Dutch universities, along with rising financial barriers, was endangering access. A growing number of courses capped student numbers and there were limited opportunities to progress from vocational to academic education.

“Higher financial barriers are a threat. Increasing tuition fees, higher tuition fees for specific higher education programmes deemed excellent and the upcoming proposal to remove student grants, are creating great inequity in access to higher education.”

Compromise

Hans de Wit, professor of internationalisation of higher education at Amsterdam University of Applied Sciences and director of the Centre for Higher Education Internationalisation at Università Cattolica del Sacro Cuore in Milan, told University World News that the deal would likely go ahead.

“The compromise that has been reached on the issue of replacing study grants with study loans has taken quite some time and in essence in its final results received broad acceptance from right to left in parliament, but also in the higher education sector, as the cuts will be reinvested in higher education.”

De Wit said the two opposition parties – D66, a liberal centre party, and Green Left – had “managed to take some of the more critical points out of the original proposal”.

These included “maintaining the free public transport card for students – and even giving it to students in vocational schools – providing more options for scholarships for students from lower income families, extending the period to repay the debt to 35 years, and more influence of students on budgets of universities”.

The protests by student associations were not unexpected but “do not seem to have become massive and able to influence the final vote in parliament and senate”, said De Wit.

“The students fear that it will reduce access to higher education as lower income families will not be inclined to create big debts, but experiences elsewhere like in the United Kingdom do not prove that this is the case.”