Bafög, student loan & Co .: Demand for KfW loans explodes

Berlin The demand for student loans from the state-owned KfW banking group rose sharply in the Corona year 2020. The number of applications rose by a whopping 140 percent from 20,300 in 2019 to 48,560 last year. This is shown by the response of the federal government to a small request from the Green parliamentary group, which the Handelsblatt has received. In the first three months of this year there were already 8337 applications.

The bottom line, however, is only a very small amount of less than 200 euros, as the government itself calculates: If someone received the maximum loan amount of 650 euros per month for a year during the pandemic, this results in a capital debt of 7800 euros and over a repayment period of 20 years an interest burden of 4663.95 euros. “Of this, 180.41 euros will be borne by the Federal Ministry of Education and Research during the disbursement phase. The student has to pay 4483.54 euros himself, ”writes the Ministry of Education.

At the same time, according to government information, the Bafög – still by far the largest funding pool for student finance – has regularly left over three-digit million amounts compared to the planned figures. From 2017 to 2019 it was a total of 1.34 billion euros.

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The government explains this with the good economic situation: Because of the rising parental income, fewer and fewer students are entitled to student loans. But also for the crisis year 2020 there was a remaining amount of 360 million euros.

Government saves more than a billion euros on student loans

“The failure of Federal Education Minister Karliczek to provide help is becoming increasingly expensive for the students,” criticizes the Greens’ university expert, Kai Gehring. “First of all, she is giving back over one billion euros to Finance Minister Scholz, which was planned as student loans for students in need. Now she is declaring expensive KfW student loans with immense debt risks as Corona support. ”

The job of an education minister is not “to initiate flourishing business for KfW, but to help students who are in need through no fault of their own, without luring them into the debt trap”.

So that nobody has to break off their studies because of the pandemic, the Greens are calling again for student loans to be opened up to all students in financial need. The SPD and the science ministers of the federal states also called for this in 2020. The proportion of students receiving student loans has been falling for years and was most recently at 18 percent. They received an average of 435 euros per month.

The chief analyst of the Center for Higher Education Development CHE, Ulrich Müller, sees the current financial crisis of many students as a “direct consequence of a lack of flexibility in state funding: It is not so variable that it can be easily adapted to changing conditions”.

Only 18 percent of students receive student loans

The real problem is the student loan, says Müller. “It actually represents the heart of student finance, but it is no longer beating steadily, has dropouts, is getting weaker.” Karliczek should actually be very concerned about the low funding rates.

“A heart operation would be necessary, and the responsible minister distributes placebos with the little crucial interest-free in the disbursement phase of the KfW student loan and with the bureaucratic bridging aid.”

According to the Studentenwerk, this bridging aid of up to 500 euros per month has been applied for around 460,000 times and approved 300,000 times since June 2020. A total of around 135 million euros was paid out. However, it is considered very bureaucratic and has to be re-applied for on a monthly basis. In addition, students must provide evidence of a pandemic-related emergency by means of an account statement.

CHE analyst Müller had already warned in mid-2020 before the short-term interest exemption for student loans: The zero percent interest rate appeared “generous at first glance, but on closer inspection it looks more like a decoy offer,” he said at the time. Because after the pandemic, the usual, expensive interest rate will apply again.

Many foreign students use the KfW loan

A disproportionately large number of foreign students took advantage of the KfW loan during the crisis. From May 2020 to March 2021, they received a good 19,000 of all loans. The state also supports foreigners because studying is the ideal opportunity to bring skilled workers to Germany.

However, because fewer foreign students came to Germany during the pandemic, the Institute of German Business recently warned that with this, with a delay, “the shortage of skilled workers is threatening to become even greater as a result of the pandemic”. According to statisticians, only 99,000 foreigners started studying in Germany in 2020 – a fifth less than in 2019.

The KfW student loan, which was introduced in 2006 and which can be applied for regardless of parents’ income and other collateral, is, according to government information, more often used by “non-traditional” students, e.g. older students, with children, previous vocational training or non-academic students Parental homes.

You will then succeed in entering the labor market particularly well: You have an above-average employment rate and earn higher incomes than the average of the graduates. Since the start of the KfW student loan, 377,489 students have received funding. There are currently 139,634 in the repayment phase.

More: Read here what Germany’s universities are lacking