The introduction of student loans in the Netherlands appears to have severely cut the number of students progressing to a master¡¯s degree, possibly because of anxiety over student debt.

Despite assurances from the government when?it was introduced, the policy appears to have backfired, according to?from the country¡¯s statistics agency, Statistics Netherlands.

The government phased out universal grants for living costs ¨C which came to around €280 (?241) a month for students living away from home ¨C in 2015, arguing that because graduates profited from their degrees over their careers, they should shoulder more of the costs.

It was also hoped that the debt would pressure Dutch students to finish their courses more quickly, making the system more efficient.

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But after the loan system was introduced, the number of students going on to a master¡¯s course fell, from 85 per cent in 2014 to 70 per cent in 2018, a ¡°big change that we weren¡¯t necessarily anticipating¡±, said Lonneke van den Berg, one of the authors of the study and a researcher at Radboud University Nijmegen.

Current living cost loans amount to just over €500 a month, although grants remain for students from poorer families.

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In 2015, the then minister of education, culture and science assured the Dutch Senate that there was ¡°no indication¡± that loans would scare students off a master¡¯s degree.

¡°They have already seen the importance of studying during their bachelor¡¯s programme,¡± Jet Bussemaker told lawmakers. ¡°These students no longer need to be convinced to study.¡±

The Dutch government assumed there would be ¡°little effect in general¡± from the loans, explained Dr van den Berg, because the levels of debt were small in comparison to the wage pay-off later in life.

¡°But I think they weren¡¯t aware of the anxiety around taking out a loan,¡± she said. ¡°There are also mental costs of taking out a loan.¡± It was still unclear, she added, whether students have been put off doing a master¡¯s permanently or would return to education later in life.

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The findings prove that ¡°human behaviour is much more complex than what simplistic economic theories make it¡± and that ¡°a student is more than a homo economicus¡±, tweeted Dirk Van Damme, head of the Centre for Educational Research and Innovation at the Paris-based Organisation for Economic Co-operation and Development.

The country¡¯s main student union, the LSVb, has also seized on the findings, arguing that they show the loan system was putting students off continuing their education.

It appears that the introduction of loans also had little impact on whether students finished their bachelor¡¯s degrees in time or hopped between courses, Dr van den Berg added ¨C the research found that improving trends continued unchanged.

The burden of debt could have pressured students into finishing quickly ¨C but this could just as easily have been cancelled out by extra stress and the need to take side jobs for students who turned the loans down, she said.

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A spokesman for the Dutch ministry of education, culture and science declined to comment, as parties are still in talks to form a government following a general election in March.

david.matthews@timeshighereducation.com