Student Finance (Studiefinanciering)
Student finance (studiefinanciering) is the financial support that students in higher education can receive from DUO (Education Executive Agency). It consists of several components: a basic loan, a supplementary grant (depending on parental income), a tuition fee credit, and the student travel product. From a tax perspective, the student debt is not deductible, and neither is the interest you pay on your student debt after graduating. Student debt does not count as debt in <a href="/en/glossary/box-3">box 3</a> and therefore does not reduce your wealth for wealth tax purposes. However, student debt can affect your maximum mortgage when buying a home.
Example
After your studies you have a student debt of €25,000. This debt is not deductible in your tax return and does not count as debt in box 3. Your savings of €40,000 are therefore fully counted for wealth tax purposes, without deduction of the student debt.
Why does this matter?
Many former students don't know that their student debt is not a deduction and doesn't count in box 3. This may feel unfair, but it is current law. Keep this in mind for your financial planning and tax return.
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