European student loan interest rate increases

Student borrowers in Germany and the Netherlands are facing rising interest costs on government-backed loans.

In Germany, projections indicate that the average total interest burden for fully repaid KfW student loans could reach approximately 4,493 euros by 2026, a nearly threefold increase compared to 2017 levels. Current interest rates are reported to fluctuate between less than 5 percent and more than 7 percent. While KfW maintains that rates are set to cover administrative and risk costs rather than to generate profit, critics have highlighted that nearly 30,000 borrowers are struggling with rates exceeding 7 percent.

In the Netherlands, the Dutch Education Executive Agency (DUO) announced that interest rates will rise in 2027 due to increased government debt servicing costs. Under the older 15-year repayment system, rates are expected to jump from 2.29% to 3.28%, while the newer 35-year scheme will see an increase from 2.33% to 2.70%. Student organizations have criticized these hikes, noting they exceed previously discussed interest caps and describing the move as a ‘kick in the teeth’ for students facing economic hardship.