Student - February 17, 2010

Student would rather work than borrow

If the government decides to turn the basic student grant into a loan, students are going to take more part-time jobs or go knocking at their parents' doors more often. One in seven applied sciences students won't go to college at all.

51% should take more part-time jobs, 43% will ask their parents
Over the past week Resource has asked 300 students in Wageningen, Velp and Leeuwarden what life would be like for them if the basic grant became a loan.
Half of the students would then take a job or increase their hours in their current jobs. It's clear that this would be at the expense of any voluntary work and involvement in running student organizations. One in ten students think they will finish their studies faster although they are quick to add that they are not messing around now. What will change, for example, is that they will no longer opt to take a year off to help run a student society.
Parents will also help bear the brunt of any cuts in the basic grant: forty three percent of the students would knock at their parents' doors. Remarkably, taking out a loan comes third in the list of options. The political parties want to turn the basic grant into a loan, but Wageningen students don't seem to be very keen on debts. From a handful of reactions it appears that students are quite afraid of mounting debt.
The survey revealed one striking difference between students on academic courses and those on applied science courses. If the basic grant becomes a loan, VHL will have considerably fewer students. A full fifteen percent of VHL students would not go to college at all, compared to seven percent of Wageningen university students. This is all the more remarkable in view of the government's wish to keep higher education accessible. It means that one in seven VHL students would drop out.
The Wageningen Student Organization is dead against the scrapping of student grants, precisely because it would jeopardize the accessibility of higher education. WSO chair Evelien Hennekens: 'That accessibility must be preserved and we don't believe a loan system will do that. I realize that something may have to change, but access to education is so important that this must not be allowed.'
The results of the survey don't surprise Hennekens at all. 'A lot of people are scared of loans. I hear many people talking about this. Personally, I would have opted for a combination of more part-time work and more borrowing. But I wouldn't really like to borrow more. It means starting your working life with a big debt.'
Over recent weeks the WSO has carried out a number of lightning protests to make students and others aware of the plans for cuts. They did this together with the Wageningen Action Committee, a group of worried students. 'Many people are unaware of this', Hennekens knows. But she thinks there is an increasing willingness to take action. 'People keep coming up to us and asking: when are we going to The Hague?'
There are no concrete plans yet, but it's beginning to look as though the basic grant will disappear. The Cabinet now has 20 working groups figuring out how the government can save thirty five million Euros. Scrapping the basic grant seems a realistic option. It would free up one billion Euros, and all the major parties from the Green Left to the Conservatives have proposed it. The proposals vary but in one form or another they all entail students paying back? their grant.

The Survey
Resource journalists spoke to 302 students in the Forum, the Leeuwenborch, the Dreijen, and VHL in Velp and Leeuwarden. One hundred and fifty of them are at VHL, 147 at the University, and five did not wish to co-operate. In total there are 6500 university students and 4300 VHL students at Wageningen UR.
We asked the students one question: if the basic grant is turned into a loan, how will you cope? They could choose one or two options from a list of six: borrow more, economize more, earn (more), ask their parents, get through their course faster, or not study at all.

Cornelia Langeveld, VHL Velp,
Garden and Landscape design
'I have already accumulated a debt of 22.000 Euros,but if I complete my studies I won't need to pay it back. I would think more carefully about how and what I would study. I might do a part-time course so I could take a job on the side. Otherwise you end up with a very large debt. It really takes a number of years before you have finished repaying it, and I do want to be able to buy a house later.'
 
Bas Boterman, WU, Urban environmental management
'I'd continue studying and ask my parents to help me out, so as not to build up a massive debt. But I would totally focus on my course. Last year I was chairman of Argo; that set me back a whole year. The university did give me a grant, but that doesn't cover the costs. I don't think I should burden my parents with extra costs for this kind of additional activity. Argo will probably carry on, but it will be much more difficult to go on offering top sports at the highest level. Running the society, coaching and participating in committees: it all takes a lot of time. If students are to lose their grants then I foresee that all these additional, really worthwhile activities are the first things they will drop.'

Annemarie Baars, WU, Nutrition and Health (BVG)
'I'd ask my parents for help and get a part-time job, and if that wasn't enough I would borrow more money. I would stay on at university, I think. I had a part-time job when I did my BSc, but now I don't. The MSc is more intensive and I also want to spend my time on sports and socializing.'

Jaap Sok, WU, Economics and Policy (BEB)
'Borrowing money isn't an option for me. I'd try to get a part-time job. Right now I work half a day a week at NSure, a Wageningen spin-off. If the grants are scrapped I could, for instance, ask for more hours. It would be a shame if the basic grant disappears, but we don't fully realize how much we receive from the state. And there isn't a shortcut to good future prospects. It's only right that we do something towards our own future. We live in a country where citizens ask a lot and give little. Sometimes you just have to take responsibility for things.'

Wim Paas, WU, International Land and Water Management (BIL)
'I had a job for a few years before I started at university. If the basic grants disappear I can eat into my savings or start working again. I don't have any debts now and I want to keep it that way. Students have a fairly luxurious existence, I think. I often hear fellow students saying they're flying to a European city for the weekend, and I also see students wearing expensive clothes. It could all be a bit less cushy. I think the Forum canteen is too expensive to eat at every day. We have just been to the C1000 supermarket. We got some corn bread, cheese spread, meat salad and two Mona puddings. Three Euros ninety for two people. But I do think the Netherlands has to aim for a knowledge-based economy. If the government invests the basic grant budget in education, then I'd find that acceptable.'

Kitty Ludwig, VHL Leeuwarden,
Animal Management
'I'd borrow more money or possibly ask my parents to help out. I think extra-curricular activities are very important and that will get more difficult if you have a part-time job, which anyway generally has little added value in terms of one's learning process. At the moment I am chair of student society Osiris and that adds a lot to my learning process and development. I'm learning a lot: about responsibility, working independently, getting on with people, communication. Afterwards, when you enter the world of business or industry, you need all that.
Without a basic grant I'd be less likely to be able to do this. And that would be an awful shame. Every student should have the opportunity to further develop themselves outside school by being involved in extra-curricular activities.'

Student debts mount up fast
What will it mean if the basic grant disappears and you have to borrow everything? At present the basic grant amounts to 266 Euros. The average Wageningen student who receives such a grant for five years will end up having received 15,960 Euros. But the debt will be higher, because interest also has to be paid. At the moment the interest rate is 2.39 percent. So the debt will then amount to 18,000 Euros. You can work out this calculation yourself if you visit the site of the Department of Education and Implementation, formerly the IB-groep.
But then you just get 266 Euros a month, the value of the present basic grant. With that sort of money you can't afford even the humblest room. The amounts increase proportionally when you borrow more. A maximum full 'prestatie' grant (i.e. basic plus complementary grant) of 505 Euros a month will then result in a debt totaling roughly 34.000 Euros. Which you eventually pay back in monthly installments of around 230 Euros.
And it could be much worse, because the amounts mentioned are based on the present low interest rates of 2.39 percent. The examples are made up. At present the grants system still exists. But even within this system you can run up considerable debts. This has become apparent from the findings of a big survey carried out by Nibud. According to Nibud, students are borrowing more and more and barely understand the consequences. Last year the average student debt of those who finished their degrees in 2008 amounted to 12,500 Euros. The present first-year students will run up a 15,000 Euro debt. And that trend will continue. A mere four out of ten students have a vague idea of the interest on their student loans. A little over half do not know that interest is already accruing during their years at university. And six out of ten students don't know that a student debt will affect their getting a mortgage. Nibud is tackling this ignorance with an online student loan 'riskometer'. Here students are assisted in calculating how much would remain of their first pay packet after all (fixed) bills and expenses and the monthly repayments of their student loans are deducted. Let's take a look at the above debt of 34,000 Euros. The total remainder of their first earnings (1790 Euros after tax) will then amount to 129 Euros (based on various assumptions about their spending patterns). And then you would be spending no more than 47 Euros a month on clothing and shoes.

LSVB survey on scrapping of student grants: www.wiljijstufi.nl
Calculate your student loan: www.nibud.nl or www.ib-groep.nl

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