The interest rate on student loans from DUO is determined each year based on the interest rate paid by the Dutch government on its loans on the international money market, on 5-year bonds over the previous period from October to September of the year preceding 1 January, when the new interest rate is determined. These interest rates fluctuate, which means that the interest rate on your student loan also changes every year. It can go up or down. Once you have finished your studies, the interest rate is fixed for 5 years. This gives you certainty for a longer period of time. For higher education, the student loan interest rate has been set at 2.33% as of 1 January 2026. Will you stop borrowing in 2026? Then the “run-up phase” will start on 1 January 2026 and this interest rate will be fixed for a period of five years, regardless of future interest rate increases during those five years. If you continue to borrow in 2026, you will be subject to a new interest rate as of 1 January 2027.
The interest rates for recent years were:
Year Interest rate (%)
2026 2.33 (SF35) and 2.29 (SF15)
2025 2.57 (SF35) and 2.21 (SF15)
2024 2.56 (SF35) and 2.95 (SF15)
2023 0.46 (SF35) and 1.78 (SF15)
2022 0.00
There are limits to how high the interest rate can or may be. This means that if the interest rate on bonds rises sharply, the interest rate on your student loan debt may also rise sharply. This new interest rate will then be calculated on the entire amount of your debt, not just on the money you borrow with knowledge of the new interest rate. The interest rate on student loans in 1992 was no less than 11 per cent.
It is also good to know that the interest on your student account is calculated on the entire amount you owe to DUO, including any previous interest charged to you. Interest is calculated on interest. This is called “compound interest”. Einstein said the following about this: the interest-on-interest effect is the ninth wonder of the world. This effect means that your assets grow faster and faster because, in addition to the interest on your deposit, you also receive interest on the interest. And this continues every year, causing your assets to grow faster and faster.
Einstein explained the interest on interest effect using wealth as an example. But in the case of our student loan, this wonder of the world is more of a nightmare. It causes your debt to increase at an ever-faster rate. The higher your debt, the more interest you pay and the faster the interest on interest effect causes your debt to increase.
If we visualise this, we see that the graph is not linear but exponential. Here, we should interpret “money deposited” as “money borrowed”. What this graph immediately shows is how much of a difference 1 per cent in interest makes to the speed at which your debt grows. In your DUO environment, you can see that an amount of interest is added to your student loan every month.
Because this interest is calculated each month on the total amount you have borrowed from DUO at that time, the interest they added last month is also included. This is how the principle of interest on interest works.
LSVb’s position
The LSVb advocates an immediate end to this nightmare for students. Stop charging interest on interest. Instead, split the amount the student owes to DUO into two categories: interest payable and money actually borrowed.
Each month, the amount owed is added to the “Interest payable” pot and money borrowed is credited to the “Money borrowed” pot. This will stop the accelerated growth of the debt of millions of students and former students in the Netherlands.