How to help students cope with their loan

Tamara MadernNibud

04-10-2010

Nibud

Independent expert centerOnly subject: household finances

Our aims:

• Increase consumer’s welfare

• Prevent overindebtedness

Why is money management so difficult?

• More and more responsibilities

• Finance is getting more and more complicated

• Influence commerce is growing

• To keep an overview on your finances isn’t easy

Dutch loan system for students

• Performance related grant Basic & additional

• Ordinary loan

• Tuition fee loan

• Free travel

• Private loan

How to get a loan?

Just klick

Survey students

• Working Youth (2005) VET-students, working 4 days, 1 day of school

• Student research (2010)VET-students and higher education

Survey working adolescents

• 90% live with their parents• Minimum income

1 out of 3 has debts (€ 900)

When living on their own:2 out of 3 have debts (€ 1585)

Student research

Loan amount

Type Amount €

Public loan 10.211

Other loan 276

Overdrawn 414

Creditcard 1.437

The average Dutch student has a debt of €13.318 when he finish his study

Loan amount

Amount monthly €

Total debt€

Gender Male 415 11.469

Female 375 8.703

Level of education VET 255 5052

Higher 392 9.083

University 438 13.075

Age 18-21 307 4.973

22-25 448 12.151

26-29 582 18.300

Total Mean 396 10.217

Median 350 6.500

52

42

3838

27

24

19

915

Reason to borrow

My parents can't support me

I just don't have money

I will not burden my parents

I don't want to work

To relax

I don't get the basic public loan

Because of my internship I can't work

I need money for study abroad

Facts• 46 % has a debt, only 80% knows the

amount

• 44 % knows the interest rate

• 7% believes there’s no interest

Facts• 59% wish they had borrowed less

• 53% the loan is a burden

• 66% thinks that other students borrow to easy

Conclusion

Students don’t think before they borrow

They borrow for luxury!

Approach

Borrow money for study is not a bad thing, but know what you are doing!

Broad approach necessary

• Parents

• Education

• DUO

• Government

• Banks

Nibud competences 19 – 23 years

• Balance income, expenditure, assets and debts.

• Shop consciously, ensuring that purchasing patterns fit in with budget, wishes and possibilities.

• Pro-actively keep administration up-to-date.

• Ensure their income is sufficient.

Nibud 2009

Nibud competences 19 – 23 years

• Consciously save and borrow.

• Avoid problematic debts.

• Take out appropriate insurance.

• Adjust finances according to changes in circumstances or lifecycle.

Nibud 2009

Study loan guide