Spring Memorandum: Higher education must also make cuts
In the coming years, the cabinet is going to cut up to €200 million from higher education and study financing. A significant portion of that amount will be borne by first-year students, according to the new Spring Memorandum.
We cannot keep throwing money around, is the government’s message in the Spring Memorandum that Finance Minister Sigrid Kaag sent to the House of Representatives today. It contains financial windfalls and setbacks for the central government, plus new spending and spending cuts.
High energy prices, the war in Ukraine, rising interest rates, and other setbacks threaten to push costs out of control. Almost all ministries must cut spending.
Only the ministries of Defense and General Affairs (including the king) are spared. But the Ministry of OCW is going to contribute hundreds of millions of euros, up to €664 million in 2027. Part of that, up to €198 million in 2027, will come from higher education and research.
First-year students
It is mainly first-year students who suffer the blow: their tuition fees will no longer be reduced by half as of September 2024, which saves more money than expected. In the years 2024-2027, this will add up to about €450 million.
The system is being nickeled and dimed: small cuts are being made here and there. Research financier NWO will receive €3 million euros less annually beginning 2029. Starting that same year, universities will receive €20 million less from the hundreds of millions in “study advance funds” (a holdover from the old loan system). The ministry is also discontinuing the subsidies that are already expiring for second teacher training programs and for “open and online education.”
It is also clear that except for a wage and price adjustment based on CPB estimates, the cabinet is not allocating any additional money for salaries in education. Employers had requested this in a letter. Otherwise, they would face a daunting dilemma in negotiations with the unions over a new collective bargaining agreement. The unions demanded 14 percent. The cabinet did not comment.
Windfall
Yet there are also windfalls in the OCW budget. The financing of studies, for example, will cost less, as the ministry expects that there will be fewer students than previously estimated. That would already save €160 million next year.
Those lower student numbers also save on higher education funding. Add to that the fact that fewer babies were born, meaning fewer children will attend elementary school. These adjustments do not initially save that much money, but it amounts to €420 million in 2028.
For the treasury, the increase in interest rates is a problem, but fortunately, the interest on student debt is rising along with it: it will generate an additional €246 million per year.
Corona
There is also money left over in education from the hundreds of millions in aid in the corona crisis. For example, the National Education Program included a concession to students whose studies were delayed due to corona.
In addition, fewer free self-tests were needed for students and staff than anticipated. A total of €41 million will be removed from the budget, the explanation says. That money all goes back to the treasury.
STAP gone
Earlier this week it was leaked that beginning next year, the popular but sharply criticized STAP subsidies of €1,000 euros for continuing education will end. This cut will already save €330 million in 2024.
STAP subsidies fall under the Ministry of Social Affairs and Employment. So the cut will not be borne by education, but universities and colleges will feel it. They were just in the process, well behind commercial providers, of putting their education and courses into STAP’s systems. And in the future, students without student loans would have been allowed to use the money for multi-year courses.
But none of that is going to happen. Incidentally, there was considerable skepticism about the content of some training. For example, courses in alternative medicine were offered, to the annoyance of the Association Against Quackery. You could also book a “two-day exploration of yourself” in Paris or Antwerp.
The subsidies replaced the deduction of educational expenses in tax returns. It is not yet known whether that deduction will now return. In the coming period, Minister Van Gennip will look at how she can continue to encourage continuing education.
