The Effect of Behavioural Motives on Student Loan Behaviour in the Netherlands

From the academic year 2014-2015, the Dutch government has implemented the social loan system in favour of the grant system. At present time, the student loan seems a good investment in one's future, yet take-up rates are relatively low. Many reasons have been found to influence borrowing decisions, but this paper sets out to uncover behavioural motives that are present amongst students. An online survey with 271 Dutch students studies these effects, and found that debt aversion influences the decision to utilize student loans, whilst risk aversion affect the decision regarding how much to borrow each month. Time preferences have a more profound effect, influencing both decisions, and the attitude of students towards the social loan system as a whole affects whether students choose to utilize loans from the Dutch government during their studies.