Amsterdam municipal credit bank is preparing to launch a trial project designed to help cancel some debt of the city’s young adults caused by student loans. It will take over the debt if the individual agrees to engage with training schemes. The project is part of a drive to liberate people who are struggling to get into higher education or work afterward due to crippling debts.
The city of Amsterdam said in a press release:
Amsterdam believes that every young person deserves a chance for a good future. Debts should not stand in the way of work and education. Unfortunately, that is often the case now. The aim of this project is to help more young people pay off their debt and at the same time offer them the opportunity to build their future.
Young Dutch adults have been increasingly borrowing money to go to school, only to find it ends up getting in the way of them joining the marketplace or completing the higher education courses. Therefore, the city has now decided to have a municipal credit bank negotiate with creditors to buy out the student debts. The debts that are bought out will still have to be repaid but per the individual’s means.
The participating creditors in the scheme will be paid an incentive of €750 (approximately $830) to transfer the debt to the municipality’s bank. If the student successfully engages in an educational program or training, they’ll be eligible to have some of the debt canceled.
Marjolein Moorman, Amsterdam’s deputy mayor, said:
Debts cause a lot of stress. And in the case of young people, debts often determine their future. The majority of these young people started out in arrears and, due to bad luck or ignorance, found themselves in a situation where they could not get out without help. That is why we are now going to help them so that they can make a new start.
The debt-transfer project will begin this February. Every person who participates in the scheme will be assigned a coach who will help them devise a “guidance plan” and navigate the formalities of the program. The city realizes that its younger citizens with unstable incomes find it near-impossible to restructure their finances and make the required repayments.
Statistics from official data show that over a third (34%) of Amsterdammers between the ages of 18 and 34 have debt. The amount of people with student debt has risen from 388,000 to 1.4 million, and the average student debt in the Netherlands has gone up from €12,400 in 2015 to €13,700 in 2019.
