- Education , Student
- 04/02/2021
This is how your basic grant died
About hard cutbacks and wondrous promises
These days it is nothing out of the ordinary for students to accumulate large debts. For almost 30 years preceding 2015, this was different. In 2015, the Dutch government put an end to the largely disliked basic grant. A story about hard cutbacks and wondrous promises. “The situation completely exploded that evening.”
In this first part of a series of investigative stories, we reconstruct how the basic student grant was abolished in 2015.
- The basic grant had been on the cards for years before it was abolished. The grant was no longer a shadow of what it had been
- Only in the second Rutte cabinet (conservative liberals (VVD) with the social democrats (PvdA)), and with the support of the opposition, a majority was found for the introduction of a ‘social loan system’.
- Ultimately, the deciding factor was that billions had to be cut anyway in the aftermath of the global financial crisis
- There wasn’t much discussion about the desirability of students going into debt at the time
- Student and student organisations had no chance of stopping the abolition when the minds in The Hague were made up
Beaten, disappointed, and mostly dead tired. After months of meetings, protests and discussions, and after a tense debate lasting almost 14 hours at the Binnenhof (seat of Government) the decision was taken at 23:37 on 20 January 2015 to abolish the basic grant once and for all. It would be replaced by a sociaal leenstelsel, an income contingent student loan. The Chair of the House of Representatives, Ankie Broekers-Knol, declared “I conclude that this bill is passed by 36 to 29 votes.”
“We were at the Binnenhof very early that morning, with representatives of students and school pupils to watch everything that was happening from the public tribune,” says the then Chair of the Landelijke Studentenvakbond (the Dutch Student Union, LSVb) Tom Hoven, currently spokesperson at the Rijksdienst voor Ondernemend Nederland (Netherlands Enterprise Agency). “The debate was not a foregone conclusion even though we knew that we were starting with a significant disadvantage. I know for sure that we, the civil servants who were involved, and the Minister of Education were very nervous about what would transpire. Afterwards, I finally fell asleep in a hostel in The Hague at three o’clock in the morning tossing and turning from tension and disappointment.”
Five years later, Andrej Josic, who was then involved in the Landelijk Aktie Komitee Scholieren (LAKS, national pupils action group) remembers the disappointment as if it was yesterday. The basic grant was abolished. But was that disappointment really about the scrapping of the basic grant? “To me the biggest shame was that the period of closely following the debates and discussions with the Ministry and Members of Parliament came to an abrupt end. We had travelled endlessly around the Amsterdam, The Hague, Utrecht triangle for meetings. We had frequent meetings with the unions in a fast food chain at the Binnenhof. “Imagine, at 17 years old I had direct contact with the Chair of the House of Representatives, Anouchka van Miltenburg, and had the mobile phone numbers of a lot of politicians. We were even allowed to read some of the papers before they were discussed in the House of Representatives. It was very impressive.”
A few months before this, Josic, on behalf of LAKS, was seated at a table with the then Minister of Education Jet Bussemaker, when the unions were permitted to see the proposal for the loan system before it was sent to the House of Representatives. “I was there on my own. Really stupid as I had never seen a parliamentary bill before. It was a pile of papers full of legal terms and interest rate calculations. Now I would be able to read it, but at the time I looked raptly at Bussemaker, opposite me. When I was asked for my response, I said ‘I am in full agreement with the LSVb’. That seemed to be the best answer.”
Blue piggy bank
Tom Hoven used the same meeting to invite the Minister for the demonstration against the loan system on the Malieveld on 14 November 2014. The student of Biological and Medical Laboratory Research at Nijmegen University walked over to his Eastpak rucksack, took out the A4 invitation, and laid it in front of the Minister. A civil servant asked if he did not first want to read the bill. His answer was “No, I don’t believe it is necessary." Hoven firmly believed that the income contingent loan scheme would be detrimental to future students. “We had our doubts for a long time as little was known when the plan was included in the Government agreement in 2012. But right from the start, my biggest concern was saddling young people with huge debts.”
At the school pupils union too there was much discussion about what they should do about that strange new loan system. Josic says that “The student unions tried to convince us that it would affect the future of our constituency. In the end, we joined the protests. The first actions were playful and sweet. We sent all Members of Parliament a blue piggy bank. At the time, the main argument against the loan scheme was that a large group of people would not be able to afford to study.”
Postponement and suspending
With hindsight, the action that had the best chance to save the basic grant was far from playful and sweet. The Minister of Education Jet Bussemaker was under time pressure on the proposal for the loan system. Postponement or suspending the planned debate in the House of Representatives at the end of October 2014 could have major consequences.
The students unions got to work with some of the political parties to prepare as many Parliamentary questions as they could for the last round of questions. The goals were: delays and suspensions in the debate; postponement; and ultimately possibly the annulment of the bill altogether. Josic says that “We made up the most ridiculous detailed questions which we submitted with all sorts of minor changes. We were very much hoping that we could stretch out the case.”
The unions and parties involved, however, had not taken the work ethic of the Ministry of Education into account. A group of civil servants worked on dozens of pages to answer 170 questions the night before the debate so that Bussemaker could make some speed in the House of Representatives.
Years before this political endgame, it was clear that the basic grant was doomed. With hindsight, the school pupils and students had no chance, despite the piggy banks, demonstrations and tons of Parliamentary questions. Over time, there was not one single political party that was really happy with the basic grant any more.
Socialist Party Member of Parliament Jasper van Dijk, spokesperson for education in the House of Representatives until 2016, remembers when the then Minister of Education Ronald Plasterk sounded out the House by suggesting in 2007 that it may be time to bid the basic grant farewell. “That was one of his suggestions that got nowhere. But it did prepare the ground for the idea.”
Huge news
Lisa Westerveld, now a Member of Parliament for GroenLinks says that “I had just become the Chair of the LSVb in 2007. The RTL Nieuws news channel phoned me early one evening in October. I was in my sports kit in the train from Utrecht to Nijmegen for football training. They asked me to come to their studios in Hilversum as soon as I could. They would only tell me why when I got there. It turned out that some civil servants in the Ministry had leaked the fact that they were working on calculating the amount of money that the introduction of the loan system would generate. It became huge news that night. It completely exploded.”
The day after that, Westerveld was again urgently invited somewhere, this time to the Ministry. The Chair of the Interstedelijk Studenten Overleg (Intercity Student Consultation, ISO) had also been invited. “Plasterk promised us that he would not mess around with study financing during his term in office. I think he was shocked by all the commotion. Not much later it transpired that EUR 1 billion was needed for the teachers, so I think that his civil servants had worked on various scenarios to see how they could get that money together.”
The left leaning political parties traditionally had more idealistic motives to bring up the basic grant for discussion. They believed that most of the money would unfairly end up in the hands of the students with rich parents who would study anyway, with or without a grant. Much of the right leaning parties supported a small government and greater responsibility resting with citizens, and hence with students.
The pivotal point in favour of the loan system, as is often the case, was money. Or rather, the lack thereof. The basic grant had become unaffordable with the number of students increasing every year. In part, the banking crisis and the economic recession it triggered led the Rutte II Cabinet, that took office in 2012, to come up with drastic cutbacks. The Cabinet wanted to ‘divert’ the flow of EUR 16 billion. The country had never needed crisis management before, but it did now and it needed it fast.
Higher education could not be economised as the increase in the number of students had scraped the bottom of the barrel. To retain the country’s top position internationally, it needed more money, was heard from several quarters including the Veerman Committee with the loud approval of universities, universities of applied sciences and various political parties.
Supplementary grant
‘An income contingent student loan will be introduced in higher education and university education in place of the basic grant for the bachelor and master phases. This will apply to new students and take effect on September 2014. To guarantee access to education, the supplementary grant will fall outside the loan system,’ states the announcement on page 19 of the coalition agreement in October 2012 between the – very unlikely – VVD (People’s Party for Freedom and Democracy) and PvdA (Labour Party) coalition partners.
The hard renovation and economising agreement (named Bruggen slaan, building bridges) which contained the announcement was presented by the VVD and PvdA party leaders Rutte and Samson respectively. In the background was a photo of the recently finished bridge at the Amsterdam IJburg. Not one word was said about future student debts, and in the agreement, the Cabinet’s resolution for abolishing the basic grant was labelled ‘From good to excellent education’.
However, VVD and PvdA needed the support of the opposition for some of their plans as they did not have a majority in the Senate. The first proposal for the loan system by the Minister of Education Jet Bussemaker (PvdA) did not get it, partly because it was unclear where the savings of the cutbacks would end up. Jasper van Dijk (SP), who was anti abolition of the basic grant, said “For a while at the time, I hoped that postponement would lead to the issue being dropped, but that did not happen.”
Those involved point mostly to GroenLinks if asked which party was responsible for the fact that a proposal that did have the political majority ultimately ended up on the table. This could have happened because of the addition of what was seen as a couple of cosmetic changes such as raising the supplementary grant and naming a recipient for the monies generated by the cutbacks. Van Dijk says that “Duisenberg of the VVD and Jesse Klaver of GroenLinks – and later Mohammed Mohandis of the PvdA and Paul van Meenen of D66 – made an agreement at Duisenberg’s house while sitting beneath the terrace heater. To my mind, the students have become the victim of the fact that GroenLinks wanted to show that they were capable of governing and that the party dared to take responsibility.”
Lisa Westerveld and Janós Betkó are fully prepared to confirm that their party wanted to take responsibility. But they do not agree with the idea that GroenLinks single-handedly shelved the basic grant in favour of the loan system. Betkó, currently a policy advisor at the University of Nijmegen and blogger, has been involved in the party for years. “If you compare it to the election programmes of 2012, you will see that no one single party actually wanted to invest money in higher education. The SP hoped to remove hundreds of millions of euros from the universities because they believed that education would cope with fewer managers. The CDA (Christian democrat party) did see something in a loan scheme for the master’s phase and in being more stringent with public transport rights. That affected students heavily too.”
Study tax
According to Westerveld, “There had to be a lot of economising. Now too, I see that there is no majority in the House of Representatives for investing in education. That is painful, but it is the reality.” As a matter of fact, both she and Betkó took the usual route to become active in the party: through the student union LSVb. For years GroenLinks had been a supporter of the studietaks (study tax), a system in which you pay more income tax if you have gone through higher education. LSVb, the PvdA and GroenLinks devised this plan in about 2003, and Westerveld and Betkó still support it.
The pair even fought to retain the basic grant, they say. GroenLinks’ Programme Committee came up with a proposal to replace the basic grant with a loan system in the run-up to the 2012 elections. Betkó explains that “The Education Working Group was against this and wanted to submit an amendment at the party congress. I was abroad so Lisa would explain the amendment at the congress.”
Westerveld explains the procedure. “You collect notes from members at the congress. If you collect enough, you may present your amendment on stage. I had enough for about 45 seconds in which to explain why the loan scheme was a bad idea. I talked about people’s fears in taking out loans, inequality and so on. After that, the party leader Jesse Klaver and someone from the Programme Committee argued why the loan scheme was a good idea.”
Nine votes against
It seemed an even race at first. “Ultimately, I think there were only nine votes against our amendment. It was not even 1% of the 1,500 visitors or so to the congress,” recalls Westerveld.
“I was happy that it was not a difference of just one vote. In that case I would have felt really bad,” says Betkó, “We knew that the party was divided, though the issue was not as decisive such as sustainability or peace missions. I understand the arguments for the issue at the macro level. A basic grant takes money away from all members of society and gives it to certain people, the majority of whom will later earn a lot of money. However, it can really go wrong at the micro level. Not all students will earn high salaries after studying, yet they too will incur huge debts if they want to study. Take student nurses, for example. The generalisation that highly educated people generally earn a high salary does not apply to them at all.”
Not all students will earn high salaries after studying. Take student nurses, for example. The generalisation that highly educated people generally earn a high salary does not apply to them
That the basic grant in fact kept income differences going instead of reducing them, Pieter Slaman believes was always a stumbling block for progressive parties. The historian at Leiden University earned his doctoral degree on this subject. Among his publications is ‘Staat van de student, Tweehonderd jaar politieke geschiedenis van studiefinanciering in Nederland’ (the state of the student: two hundred years of political history in study financing in the Netherlands). “Even today, higher education does not reflect the people. Higher income groups are over represented. The basic grant has only strengthened this. Many people have forgotten that.”
As a specialist in this area, Slaman sometimes gnashes his teeth when he listens to the discussions. “The people involved and the politicians continuously talk past each other. One presents an economic argument, the other an education argument. In the end, there is no clear conclusion.”
By the time it was abolished, the basic grant was a mere shadow of what it once was. Slaman explains that: “The first basic grant was very generous. You received a gift of 600 guilders on top of which was the actual grant. Hardly anybody borrowed any money. In the years thereafter, to put it disrespectfully, students were ripe for the plucking. Little by little, the grant was nibbled away.”
Window of opportunity
Almost every political movement could attach its own story and argumentation to the abolition of the basic grant. This gave Government a great window of opportunity to push the proposal through. The PvdA and GroenLinks argued that abolishing the basic grant would finally bring an end to subsidising higher incomes through study financing. For the VVD, the cutbacks would generate EUR 1 billion, and thinking about this money, D66 saw its desire to invest in higher education fulfilled.
What about the students and school pupils? The Minister explained to them that while they would not be entitled to a basic grant anymore, they would soon get better education back in return. In anticipation of the millions freed up from the basic grant, universities and universities of higher education promised that they would free up EUR 600 billion from their often large assets over the next few years by making their education more small scale and intensive.
Even the money that would be freed up through economising from 2018 onwards would be directly put into higher education. Graduates would spend up to 4% of their income in paying back the loans, and through their student representation bodies at all educational institutions would have a say in deciding how the basic grant billions would be spent. Who could possibly be against this?
In November 2014, only a couple of thousand students and school pupils demonstrated on the Malieveld in The Hague against the loan system. The House of Representatives had already passed the Wet Studievoorschot (study loan act). The Minister of Education, Jet Bussemaker, called on the protesters to “not let themselves be driven crazy by made up stories about the consequences of the loan system”. She then added that in the 1980s, about 35,000 students had protested on the very same Malieveld against the basic grant when it was being introduced. The Minister at the time, Minister Deetman, had even been kicked in the stomach by one of the protesters. The then student leader, Maarten van Poelgeest (now a politician in – you guessed it – GroenLinks), even announced that he would have signed up for a similar type of student financing to the current loan system in a flash in the 1980s, as long as no basic grant would be introduced.
Other objections to the loan system were swept off the table. The ‘fear of loans’ that would jeopardise access to higher education, was disproved by research carried out by the Sociaal en Cultureel Planbureau (The Netherlands Institute for Social Research). The most important question – who should invest in the future, Government or young people – was not asked. By 2015, the welfare state was largely finished and market forces, self-reliance and individual responsibility had become key terms in politics.
Historian Slaman says that “On top of that, older people were always better represented in politics by far than the youth. Students are also not viewed as a vulnerable group that is largely supported by the wider society. There is still an image of partying individualistic people who are no longer in for demonstrations.”
Nevertheless, at the end of 2015, Tom Hoven and other politically active students still had some hope that the Senate would throw a spanner in the works. As mentioned above, the Cabinet did not have a majority in the Senate and the students hoped that PvdA senators in particular would not adhere to their party’s standpoint and would vote against the loan system. That had happened before.
Even now Hoven is unable to take a neutral stand when looking back at the students’ lack of willingness to protest. Why were there no large-scale student protests? “It is difficult to say. In the case of the income contingent student loan, it was not about the core question of whether students were prepared to take on debt. They were already taking out loans. It was about the amount of debt. Even if they realised that they would lose their basic grants for years to come, secondary school pupils were not released from school in great numbers to go and demonstrate in The Hague.”
Not motivated
Andrej Josic (at the time a representative of the pupils action group LAKS) says, “A few dozen of our members were angry about this. But every time we organised something, we saw that our constituency was not motivated to join in. I started to seriously doubt if a loan system was just not a relevant subject to the pupils. The worst thing is that immediately after the political decision was taken, we were asked to explain jointly with the Ministry what the system entailed. We had a cursory investigation done which, according to the ‘De Telegraaf’ newspaper, showed that the vast majority of pupils had no idea what and how they would have to take out a loan. This angered the Ministry as it led to questions being raised in Parliament. But we believed that the future students should be informed in-depth, and we did not want vulnerable young people to give up their study plans.”
Looking back, these were all outpourings from the rearguard that had no chance, concludes Josic. “Our last attempt was to organise one more symbolic protest at Prime Minister Rutte’s Torentje (the Prime Minister’s official office in a special tower in the Parliament building). We had a bouncy castle in front of it with lots of poor and rich students and that was that.”
As a university student, Josic never received a basic grant. He first went to the Erasmus School of Economics in Rotterdam. He is currently doing his master’s in Quantative Finance at the University of Amsterdam and lives in a friendly but messy student house in Amsterdam-Zuid. “It may be the nature of my subject, but the issue of the loan system does not really come up now. In my first year, I borrowed a lot of money and did not work. I will probably be about EUR 28,000 in debt in the end. That is not too bad. This is, of course, different for other people and it is true that young people start accumulating large debts early on. I still resent that. Our generation is already paying for everything that goes wrong, such as on the labour market and sustainability. And I have not even touched on the current corona crisis.”
Acceptable risk
Tom Hoven adds that “Once it had happened, at LSVb we thought that every student would now see notable improvements in education. The money that was freed up from abolishing the basic grant comes from students and should be spent on students. A sector agreement was made to this effect, but if you ask me, there are few notable improvements.”
He himself covered his university of applied sciences fees with a basic grant. He does not want to justify his standpoint after the event. “I warned about the increasing debts, but I am not under the illusion that there was even one politician that did not know that this would be one of the consequences. Even the House of Representatives took a conscious decision. It was apparently an acceptable risk.”
The next issue: Pre-investment: an impossible task
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