Paying Off Your Student Debt This Year?

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Last week I received a letter from the government. I need to start paying off my student debt this year. That means I still have a year to go. Will I be paying off my student debt this year?

Some people can say they graduated with no student loans at all. Not for me. My parents could not provide for me during my time at university.

Even though I worked 15 hours per week all through college, I still have a student loan of €19,000. Since I graduated in 2017 I paid off a total of €6,000.

This year, I am not planning to pay off my student loan as well.

Why not?

First of all, in the Netherlands the student loans you take are from the government. They provide you with a 15 year repayment plan, that starts 2 years after graduation (counting in calendar years). I graduated in September 2017, I am obliged to start paying from January 2020. Before that, I can pay them if I want to but it is not mandatory

Currently, the interest rate that we pay over our student debt is 0%. Yes you read that correctly, 0% !!! The Dutch government is charging the same interest rate they pay. In addition, the interest rate is fixed for 5 years. The interest rate is so low, that I don’t see the use of paying off my student debt.

Better ways to utilise my money

There are way better things that we can do with that money, like:

These above options will all make you more money compared to paying your student loans. In addition, ‘What you focus on expands. So focus on what you want, not on what you do not want’ – Esther Jno-Charles.

I want to be financially free, and I believe that investing and making my money work for me is the way to do it.

By saving the amount that I initially wanted to pay off, I can start making 7% annually instead of nothing. With that extra money, I can earn more money! Carefully think about it before you start paying off your student debt, you might be able to use that money it in another way that generates more money!

Are you paying off your student debt in 2019?

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5 thoughts on “Paying Off Your Student Debt This Year?”

  1. I am definitely not paying off my students loans. I have written about that on my blog, and was interviewed by the guys over at Financial Independence Europe Podcast (partly about not paying my student loans).

    The reasons for this are the same as yours. The interest rate is 0.01% for me, and I can earn (on average) more than that. Plus, I can easily pay back the full amount with my investments. That makes the downside risk very minimal.

    • Yes I fully agree, for me I could also pay back immediately if I wanted to but what would spoil the fun of having it and investing it!
      The podcast episode sounds interesting, will be checking that out for sure (love podcasts!)


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