Shady company skims off student finance of at least 350 internationals

For a hefty fee, a small company in Tilburg ‘helps’ international students apply for student finance. Some Hanze internationals engaged mSF’s questionable services.

The Tilburg-based company myStudentFinance (hereinafter mSF) helps students, especially international students, apply for student finance from DUO. Get up to € 1,300 per month… No cure, no pay, says the mSF website.
But international students who used mSF’s services complain that they have to pay much more than they expected. The company skims money off the first payment from DUO, which is often higher than the international students anticipate.

He thought it would be around € 200, but John had to pay € 870

‘I only wanted to apply for a basic grant of € 300’, says Finnish student John Nordberg, who is studying for a master’s degree in Leiden. He expected mSF’s assistance to cost him between €100 and €200. But it ended up costing € 870 because mSF arranged a maximum student loan for him without asking.

When he complained about this, the company quickly replied by email: you didn’t say you did not want a loan. The company also refers to its terms and conditions, which state that mSF acts as a representative for students when applying for grants and loans from DUO.

According to the Dutch Prosecution Service (Openbaar Ministerie, OM, in Dutch) what the company is doing is not illegal. Students find it misleading. ‘I am really surprised that all this is legally permitted’, says Sarah Evink of the Interstedelijk Studenten Overleg (ISO).

Sixty percent of the first payment, there’s a catch

Students authorize mSF to use their identity code (DigiD) and have to provide all kinds of information about their work and their parents’ income. mSF then applies to DUO for student finance (stufi for short). It charges a fee of 59.99 percent of the first payment.

There is a catch, DUO warns. ‘Because they only apply for their stufi once they are already in the Netherlands, students often receive three or four months’ worth of stufi in one lump sum the first time’, says a DUO-spokesperson. And mSF then deducts almost 60 percent from 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. Sixty percent of that is € 3,000. After mSF has skimmed off the amount, students can take over the MijnDUO account.

DUO: ‘It is totally unnecessary to pay so much for a service that is actually free’

Student umbrella organisation ISO has received several complaints about the company. Chair Sarah Evink: ‘It is distressing to hear that students are spending money on information that they can simply obtain for free from DUO.’

ISO hopes politicians will ban these kinds of practices. But this will not be easy: you are always allowed to hire someone to provide you with a service, especially if the general terms and conditions state what the costs are. DUO: ‘We have received complaints from international students who felt misled. It is completely unnecessary to pay that much for a service that is actually free.’

The bank felt obliged to warn DUO because of money laundering rules… is this really okay?

Last year, a bank called DUO to ask why so much money was going to the bank accounts of one company. At that time, there were 100,000 euros in outstanding DUO payments to these accounts. The bank felt obliged to warn DUO because of money laundering rules. Is this acceptable?

When DUO investigated the matter, it turned out that the student grants of 350 international students had been paid into approximately 70 bank accounts. ‘By using so many different bank accounts, the company remained under our radar’, says the DUO spokesperson.

DUO sent a message to all students who were using mSF at the time to inform them that applications are free of charge. According to DUO, around fifteen students responded.

‘I thought this was a benevolent company that helped students, but this is sneaky’

DUO also reported the matter to the police. Is this way of working lawful? The Prosecution Service investigated the case but did not proceed with prosecution. ‘It may be morally reprehensible, but it is not punishable’, the verdict was.

Students who have started the application process via mSF must complete it. Otherwise, the company can charge hundreds of euros in costs. During the initial application, the company also sends students a PDF with all kinds of information about student finance: The Definitive Guide to Dutch Student Finance. If students withdraw during the process, they have to pay 200 euros.

‘It’s also my fault for not reading the fine print carefully’, says John Nordberg. ‘I thought this was a well-meaning company that helps students. But this is sneaky. This was not helpful. They fooled me. I hope that international students will just go to DUO from now on.’ After Nordberg complained about the situation, the company gave him a €200 discount.

DUO says it has no legal means to intervene

DUO and the Dutch Ministry of Education explore whether it is possible to arrange for student finance  to be paid into a single account: that of the student themselves. This is not yet possible, and there are good reasons for this: students with a guardian, for example, would then no longer be able to receive student grants.

The service is asking universities and colleges to properly inform their international students. Information about student finance is always free, emphasises the DUO spokesperson. ‘International students can also arrange this themselves in an hour.’

In response to questions from HOP, the Dutch Higher Education Press Agency, MyStudentFinance replied: ‘We inform customers in advance about our prices, not only in the service agreement, but also explicitly during registration, as required by Dutch and EU consumer protection legislation.

HOP, Olmo Linthorst & Naomi Bergshoeff

Photo: micheile henderson on Unsplash

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How about Hanze students?

Some Hanze students have also signed up with myStudentFinance. ‘Yes, unfortunately, the name of that company does indeed ring a bell’, says Anna Gomelskaia, coordinator of the Hanze International Social Media & Student Team, which assists prospective international Hanze students. ‘If students have questions about study finance, we always encourage them to contact DUO. Never commercial parties. We strongly advise against that. Only DUO can provide them with reliable and legally correct information.’