For six years, the interest rate on student loans stood at zero percent. What you borrowed, you paid back—nothing more. That changed in 2023, when the rate rose to 0.46 percent, and the following year it climbed to around 2.5 percent.

Many students felt blindsided: they had no idea borrowing could become more expensive. But despite student protests and political outrage, nothing changed—the interest rate went up.

Legitimate expectations

A former student argued this wasn’t fair and filed a lawsuit against the Ministry of Education. His claim: student finance provider DUO had failed to provide proper information, violating the principle of legitimate expectations.

In a brief ruling from June, which became public this week, the court dismissed that argument. The law clearly states how the interest on student loans is determined: it is tied to the rate the Dutch government itself pays for borrowing on the capital market. So the interest can go up. 

What’s more, DUO offers an online calculator to show the impact of rising interest rates, the court noted. At the current rate and a debt of 20,000 euros, you would end up paying nearly 11,800 euros in interest over 35 years.

Warning

Should there have been a warning like “Borrowing money costs money”, which is mandatory for other loans? No, the court said, because a student loan from DUO is not covered by the Financial Supervision Act.

That’s also why student loans aren’t registered with the Credit Registration Bureau. Unlike loans for, say, a car or a house, student loans come with more flexible terms: if your income is too low, you pay less, and after 35 years the remaining balance is written off.

Earlier, dozens of students threatened to file a joint lawsuit, but nothing ever came of it.

Once upon a time, interest on student loans was much higher—11 percent, in fact. For those already repaying, DUO fixes the rate for five years. So anyone who started paying back in 2022 is still at zero percent.

This article was translated using AI-assisted tools and reviewed by an editor.