The interest payable on student loans will go up from 0 to 0.46% for 140,000 college and university students who graduated after grants were abolished, the education ministry said on Tuesday.

The interest on student loans changes once every five years and the new interest rate will kick in next year.

People who graduated from college or university before grants were scrapped will pay 1.78% as will everyone who went to a vocational (mbo) college, the ministry said.

Education minister Robbert Dijkgraaf plans to introduce uniform repayments for all former students once minimal grants are brought back in the 2023-24 academic year.

Student loan agency Duo will take the personal situation of former students into account if they face difficulties meeting the higher payments, Dijkgraaf said.

Joram van Velzen, chairman of the student union Landelijke Studentenvakbond described the decision to put up interest rates as ‘bizarre’.

A generation of students borrowed money thanks to promises about “favourable terms” and that debts would not count in mortgage applications,’ he said. ‘Now, at a time when everything is becoming more expensive, it turns out they were lied to.’

The government is facing calls to include student loans in the national debt registry BKR, but this has not yet happened. Graduates are, however, asked about outstanding student loans when applying for a mortgage.

The government is bringing back student grants, which were abolished in 2015, a move which has seen student debt soar. Since then, students have had to borrow to fund their degree courses, and run up an average debt of around €25,000 by the time they graduate.