Dutch Employers Expand Tax-Free Student Loan Repayment Schemes
From 2025, more companies in the Netherlands will allow employees to use choice budgets to repay DUO loans, saving thousands in taxes and easing financial strain.
Employers across the Netherlands are increasingly introducing schemes to help staff repay DUO student loans tax-free, providing significant financial relief. Starting in 2025, more collective labour agreements will allow employees to use their individual choice budgets to pay off student debt without incurring income tax, potentially saving thousands of euros over the repayment period.
Growing Employer Participation
Companies such as KPN, ING, ProRail, UWV, and Schiphol, along with the Dutch government, are expanding this benefit to thousands of employees. The maximum amounts employees can allocate to debt repayment vary by company—for example, KPN offers up to €5,000 every two years, while ProRail provides a one-time payment of €1,500.
The arrangement works by allowing employees to submit proof of their student loan repayments to their employer, who then reimburses the amount net of payroll tax. This gross-to-net benefit reduces the effective cost of repayment, offering employees financial relief while helping them pay down debt faster.
Significant Financial Benefits
The scheme has proven to be highly beneficial. For instance, an employee using €1,000 from their choice budget annually to repay a €15,000 DUO loan could save around €530 in taxes per year. Over a typical repayment period, this could amount to €7,965—more than half the total debt. Employees with higher debts, like €30,000, can save over €15,000 if they use the maximum allowance consistently.
KPN HR Director Carlo Steenvoorden noted that this scheme not only helps employees but also makes companies more attractive to young graduates. “This program saves employees substantial money while positioning us as a competitive employer,” he said.
Addressing Financial and Mental Strain
The CNV trade union, which has long advocated for such arrangements, highlights the broader impact of student debt on individuals' financial well-being. Rising interest rates and long-term repayment commitments have made student loans a heavy burden for many Dutch citizens. According to CBS, over 1.6 million people had student debt at the start of 2023, with 1 million actively repaying.
Union leader Justine Feitsma emphasised the mental and financial relief provided by these programs: "Repaying student loans through the choice budget not only eases monthly expenses but also alleviates the psychological strain of long-term debt."
Encouraging Wider Adoption
Trade unions are urging more employers to adopt this initiative, which has few parallels in terms of financial benefits. Companies that have implemented it report high demand and positive feedback. For example, VGZ’s program in 2024 quickly exhausted its €200,000 allocation, helping 94 employees save €2,200 each.
As more Dutch employers embrace tax-efficient student debt repayment, the scheme is poised to become a key employment benefit, offering young professionals financial freedom while addressing the broader challenge of student debt across the Netherlands.