Organisation - February 2, 2011

No more 'perverse incentive' in extended study legislation

The cabinet maintains its stand on imposing a fine for graduates who fail to graduate on schedule, starting from September. Applied sciences universities and universities will not be fined officially for having such long-term students but they still have to reduce expenditures by at least 190 million euros a year as a whole.

In the bill submitted by Zijlstra to the Dutch House of Representatives on Tuesday, it appears that the state secretary has yielded somewhat to the demands of the Council of State. While fines for institutions could lead to higher returns, the council says that 'the value of the certificates may diminish if an institution does not have sufficient time or means to reinforce education and study supervision'.
Zijlstra acknowledges the views of the council on this issue and has amended the extended study fine for institutions into a 'generic reduction' - of about 190 million euros - in the higher education budget, which is subjected to the principle of even distribution.
Concerning transition rights for current students, Zijlstra does not foresee any problems. Implementing the legislation in September this year is judicially possible. The Council of State has advised implementing the law in 'cohorts', but Zijlstra does not want to do that because that would not result in enough savings in the coming academic year.
Furthermore, the judgement of the Dutch Supreme Court concerning the Dutch Harmonization Act (Harmonisatiewet) of 1988 referred to by the Council of State has not changed his mind. That law, according to him, had more far-reaching effects than his plans with the long-term students. These may have to pay more tuition fees but will not face any other restrictions. Zijlstra writes that 'no student will have to stop studying as a result of this bill'. They can in fact borrow the increased tuition fees. His conclusion: the consequences of an immediate implementation of the rule is 'hard in certain cases but not untenable.'
Answering a criticism from the State Council that the effect of his measure - 25 percent fewer long-term students - has not been proven, Zijlstra refers to a CPB report from 2004 on the effects of limiting study loans. Zijlstra feels that it could be more important to observe the 'experiential principle' that when certain (public) facilities or forms of services of whatever nature become more expensive, they would be used more seriously'.
He will look into the possibility for institutions to remove long-term students, although he also states that 'care should be exercised in the process', since 'this can have big consequences for students'.
The student unions view the bill with disappointment. 'The perverse incentive for universities and applied sciences universities may have gone as a result', says ISO chairman Guy Hendricks, 'but it would become more advantageous for them to hold onto long-term students. After all, the more long-term students there are, the less cost-cutting they have to make as a whole.'
Hendricks hopes that the Senate will review the bill critically. 'We have confidence that its members will go beyond their own party allegiances when necessary.'

Re:act