Omtzigt and left-wing parties want lower interest rates on student loans

ANP Productions | Bron: ANP

The Hague

Member of Parliament Pieter Omtzigt wants students from the ‘unlucky generation’ to pay significantly less interest on student loans they took out in the period when there was no basic grant. Together with GroenLinks-PvdA and Volt, he is submitting a proposal that would see them pay almost 2 percentage points less,

To provide financial cover, Omtzigt wants to simplify the so-called expat scheme. Foreign employees who work temporarily in the Netherlands do not have to pay tax on the first 30 percent of what they earn for the first five years. By gradually phasing out that advantage, Omtzigt and the left-wing parties want to structurally raise an additional 200 million euros in the long term.

The long-term low interest rates on government loans also allowed students to borrow for free for years. But now that interest rates have risen sharply, partly due to the policy pursued by the European Central Bank (ECB) to curb inflation, they have been paying approximately half a percent since this year. Next year that will increase sharply to more than 2.5 percent.

It is not yet clear whether the proposal can count on a majority in the House of Representatives. What is certain is that many parties are concerned about the rising interest on student loans, especially for students who started their studies when there was no basic grant and therefore often had no choice but to borrow.

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