Has the time come to repay your student debt? And what about the interest rate and so-called joker years?
Interest rate
The percentage that determines how much interest must be paid on student loans is set each year. This is done on the basis of the interest rate on five-year government bonds, which is legally linked to the interest rate on student loans. When you graduate, your first “fixed interest period” begins. This means that you pay the same interest rate for five years.
On 1 January 2023, the interest rate will be higher than zero for the first time since the introduction of the loan system, rising to 0.46 per cent. If you are still covered by the old system from before 2015, this percentage is 1.78 per cent.
On 1 January 2024, there will also be a significant change, with the interest rate rising to 2.56 per cent. If you are still covered by the old system, this percentage is 2.95 per cent.
Start-up phase (general):
When you have completed your education, you do not have to repay your loan immediately. DUO has given students a period of time to find a job after their studies and stabilise their financial situation before they start repaying their loan. This is called the start-up phase. It begins on 1 January after the student has completed their education and lasts for two years.
Example: if you finish on 1 September 2019, the start-up phase begins on 1 January 2020 and ends on 1 January 2022. During the start-up phase, you do not yet have to repay your loan (but you may do so). The repayment phase comes after the start-up phase.
Interest is also charged on your debt during the run-up phase.
Repayment phase for students who fall under the old system
If you received student financing for the first time for a higher professional education or university programme between 1 September 2009 and 1 September 2015, you fall under the repayment rules that apply from 2012 onwards. If you fall under the old system, you have 15 years to repay your student loan. In principle, you are expected to repay your entire student loan. The minimum monthly repayment amount is therefore the amount of the debt divided by 15 years, divided by 12 months. However, DUO must take your financial capacity into account. This means that you do not have to pay more than 12% of your income above the minimum wage per month. Your partner’s income, if applicable, is always included in the calculation of your financial capacity. You can always choose to repay your debt more quickly.
Repayment phase for students who fall under the new student finance system
If you fall under the new system, you will have more time to repay your loan. The mandatory repayment period is 35 years. If you fall under the new system, you will never have to repay more than 4% of your additional income above the minimum wage per month. Your partner’s income, if applicable, is always taken into account when calculating your financial capacity. You can always choose to repay your loan more quickly.
Student loan debt remission
At the end of the repayment period, whether 15 or 35 years, any remaining debt will be remitted. This happens automatically; students do not need to take any action. Any outstanding monthly amounts will not be remitted.
Joker years
You can choose to use so-called “joker years”. This is an option to temporarily stop repaying your student loan within the repayment period. You can stop repaying your student loan for a minimum of 3 months and a maximum of 5 years. Interest on your debt will continue to accrue. The maximum repayment period of 15 years or 35 years will be extended by the number of repayment-free months you have used.
Transitional arrangement
If you have accumulated a student loan under the conditions of the old system and you start a master’s programme or other bachelor’s programme under the conditions of the new system, you have a choice. You can choose to repay the student loan you have accumulated according to the old rules or according to the new rules.