Student loans drawdown drops by 17% in Jan

Drawdowns of student loans totalled EUR 279 million in January this year, representing a decline of 17% on the corresponding period last year, said the Bank of Finland in a release on Wednesday.

The figure was the lowest level of new student loan drawdowns in January since 2018.

The average interest rate on student loans drawn down in January 2024 was 4.46%, which was 2.22 percentage points higher than in January last year. This is the highest average interest rate on new student loan drawdowns since November 2008.

Euribor-linked loans accounted for 86% of all student loan drawdowns, and the average interest rate on these loans was 4.52%.

Banks’ own reference rates have become more popular in new student loan drawdowns.

In January 2024, 14% of new student loan drawdowns were linked to prime rates, or banks’ own reference rates, as opposed to 5% in January 2022.

The average interest rate on new drawdowns linked to banks’ own reference rates (4.04%) was slightly lower than that on Euribor-linked ones.