Company takes bite out of student grants of 350 international students: ‘They fooled me’

The Tilburg-based company MyStudentFinance focuses on supporting international students with their student finance applications to DUO. “No cure, no pay”, MSF advertises on its website. They also promise students they will “Receive up to €1,300 per month”.

However, international students complain they have to pay much more than they expected. The company skims money off the first payment they receive from DUO, which is often higher than international students anticipate, the Dutch news agency NOS reported last week (link in Dutch).

An unsolicited maximum loan

The Dutch Higher Education Press Agency (HOP) spoke to a student who is a customer of the company. “I only wanted to apply for a basic student grant of €300”, says Finnish student John Nordberg, who is enrolled in a Master’s programme in Leiden. He expected MyStudentFinance to cost him between €100 and €200. However, he ended up paying MSF €870, because the company arranged the maximum student loan for him without being asked.

When he complained to MyStudentFinance, the company quickly emailed back that he hadn’t said he didn’t want a loan. It also referred to its general terms and conditions, which state that MyStudentFinance acts as a representative of students “when submitting applications for grants and loans to DUO”.

The catch

Students must authorise MyStudentFinance to use their DigiD and provide all kinds of information about their work and their parents’ income. MSF then applies to DUO for student finance. It charges a fee of 59.99% of the first payment.

There is a catch, warns DUO. Because they only apply for their student finance once they are already in the Netherlands, students often receive their first payment in a lump sum covering three or four months, says a spokesperson. And MyStudentFinance retains 60% of that total amount.

If students do indeed receive €1,300 per month in (supplementary) grants and loans, the first payment can amount to around €5,000. 60% of that is €3,000. After MSF has skimmed off an amount, students can take over the MijnDUO account.

‘I am surprised that this is allowed’

Students find it misleading. “I am really surprised that all this is legally permitted,” says Sarah Evink of student umbrella organisation ISO. The organisation has already received several complaints about the company, says Evink. “It is distressing to hear that students are spending money on information that they can simply obtain for free from DUO.”

The ISO hopes that politicians will ban this type of commercial practice. But this will not be easy: you are always allowed to hire someone to provide you with a service, especially if the terms and conditions state what the costs are.

DUO: “We have also received complaints from international students who felt misled. It is completely unnecessary to pay so much for a service that is actually free.”

Bank raised the alarm

Last year, a bank called DUO to ask why so much money was being transferred to the bank accounts of a single company. At that moment, €100,000 in payments from DUO to those accounts were pending. Due to anti-money laundering regulations, the bank felt obliged to alert DUO. Was everything above board?

When DUO investigated the matter, it discovered that the student grants of 350 international students had been paid into around seventy bank accounts. “By using so many different bank accounts, the company managed to stay under our radar”, says the DUO spokesperson.

DUO sent a message to all students using MyStudentFinance at the time to point out that student finance applications are free of charge. About fifteen people replied, says DUO.

‘Morally reprehensible, but not punishable by law’

DUO also filed a police report. Are these activities lawful? The Public Prosecution Service investigated the matter but did not proceed with prosecution. “It may be morally reprehensible, but it’s not a criminal offence”, the Public Prosecution Service told the Higher Education Press Agency.

Once students have started the application process they must complete it. Otherwise, the company can charge hundreds of euros in costs. Early in the application process, the company also sends students a PDF containing extensive information about student financing: The Definitive Guide to Dutch Student Finance. If students withdraw during the process, they have to pay €200 in costs.

“It’s also my fault for not reading the fine print properly”, Nordberg says repeatedly. “But I thought this was a well-meaning company that helped students. This is sneaky, though. They didn’t help me. They fooled me. I hope that from now on, international students will simply go to DUO.” After Nordberg complained about the situation, the company gave him a €200 discount.

According to Chamber of Commerce records, MyStudentFinance was set up in 2023 by a Polish man in Tilburg. During its investigation, DUO temporarily suspended payments to the company. But the company’s owner protested, and DUO says it has no legal means to intervene.

DUO is exploring with the Ministry of Education, Culture and Science whether student financing could be paid only into students’ own accounts. This is not yet possible, and for good reason: for example, students under financial guardianship would then no longer be able to receive student financing.

‘Arrange it yourself in an hour’

The agency is asking higher education institutions to properly inform their international students. Information about student finance is always free, the DUO spokesperson emphasises. “International students can also arrange this themselves in an hour.”

When asked by HOP, MyStudentFinance replied: “We do inform customers of our pricing in advance, not only in the service agreement but also explicitly during sign-up as required by Dutch and EU consumer protection laws.”

HOP, Olmo Linthorst & Naomi Bergshoeff

Translation: Taalcentrum-VU