Student - May 22, 2012

Students borrow and save

A third of all students borrow money from student funding agency DUO: an average of 365 euros per month. Despite this, seventy percent have 4,500 euros stashed away in savings. One in five students takes out a loan just to have a good time, notes a concerned Nibud.

In the past, one in ten applied and academic university students used to take out a loan with DUO but that proportion has now increased to 38 percent, according to a survey of nearly three thousand students by Nibud (National Institute for Family Finance Information). A student borrowing an average of 365 euros a month for four years will ultimately have to pay back at least 17,500 euros plus interest. Nibud expects that amount to only get larger now the government is requiring a bigger contribution from students.
It is therefore increasingly important for students to borrow sensibly and use the money primarily for their studies. Now 22 percent of students borrow 'for a good time'. There are also 120 thousand students who scoff at the healthcare allowance of 68 euros a month and eighty thousand who do not reclaim any tax.

Nibud is pleased to see many students are keener on saving than you might think. No less than seventy percent manage to save an average of one hundred euros a month; they have 4,522 euros (another average) in their bank account. The vast majority of students think saving is important and get worried if they can't manage this. Eighty percent of the students without loans manage to save money as opposed to 58 percent of the 38 percent of students with DUO loans.

Despite all the student loan guides, half the students still do not realize that interest is charged on DUO loans from day one. They are also not properly informed about the interest they will have to pay after they graduate. Two thirds think their borrowing behaviour is 'perfectly sound' and half were not afraid, when filling in the questionnaire this spring, that they might not be able to repay their debts later. However, students often have unrealistic expectations about their starting salary. Nibud wants to repeat its Student Survey every two years.

Students living at home have 535 euros to spend on average and students who have moved out have 915 euros. Their monthly expenditure is 603 euros and 1093 euros respectively but most are able to manage as their parents contribute towards their rent or tuition fees.

The biggest expense for students living away from home is rent, an average of 341 euros a month, followed by groceries (150 euros), tuition fees (143 euros) and healthcare insurance (106 euros). Most expenditure in the category 'other' is on holidays (83 euros a month), going out (57 euros) and mobile phones (32 euros).