The city of Amsterdam is taking over the debts of its young adults as part of a drive to liberate people who are struggling to get into work or education.

A growth in borrowing among young Dutch adults – a trend echoed elsewhere in Europe, including the UK – is said to be standing in the way of them joining the marketplace or completing higher education courses.

Under the city’s trial project, a municipal credit bank will negotiate with creditors to buy out the debts. Those on the scheme will then be issued with a loan to repay according to their means.

The creditors will be given €750 as an incentive to pass the debt on to the municipality’s bank. The young people will have more of the debt cancelled if they successfully engage in training or an educational programme.

“Debts cause a lot of stress. And in the case of young people, debts often determine their future,” said Amsterdam’s deputy mayor, Marjolein Moorman. “The majority of these young people started out in arrears and, due to bad luck or ignorance, found themselves in a situation where they could not get out without help. That is why we are now going to help them so that they can make a new start.”

The debt-transfer project will start in February. Each person on the scheme will be given a coach with whom they will prepare a “guidance plan”. The city believes that young people with unstable incomes often find it near-impossible to restructure their finances and make the necessary repayments.

More than a third (34%) of Amsterdammers aged between 18 and 34 have debts, according to the official figures. The average student debt in the Netherlands has increased from €12,400 in 2015 to €13,700 in 2019. The number of individuals with student debt has also increased, rising by 388,000 to reach 1.4 million.