Student loans: new possibilities for studying abroad
Almost 60,000 students conclude a student loan agreement every year in order to ensure they complete their study programmes despite financial shortages. Recently, there have been new possibilities for financing a study programme abroad. This is the result of the CHE Student Loan Test 2014. The test also illustrates how students can identify the best offer for them.
The prospect of completing a study programme successfully is in danger if the allowance from BAföG (Germany’s student grants and loans system) runs out, there is no time for a part-time job and parental support has reached its limit. In such a situation, almost 60,000 students are concluding a student loan agreement every year in order to remedy financial shortages.
The results of the CHE Student Loan Test 2014 show that two public providers are leading in the market by a large margin: in 2013, the KfW concluded 33,000 contracts for their student loan that offers students 650 euros per month, while 20,000 students opted for the Federal Administration Office’s educational loan, which is intended to help those in the later phases of their study programme actually compete their course. In third place is the Hamburger Sparkasse, which recorded 1,900 new customers in 2013.
Student loan offers not only differ markedly with respect to costs, with interest rates ranging between 1.41% and 7.77% (effective interest in the repayment phase), but also with regard to other conditions relating to the path the course of study takes. Ulrich Müller, project manager at the CHE – Center for Higher Education and head of the Student Loan Test, said: “People who only look at the interest rates can easily overlook other key conditions, for example the KfW only facilitates semesters abroad if students are simultaneously enrolled in Germany.”
Only a few suppliers make it possible to a complete a full study programme abroad – in Germany only CareerConcept, Festo and Deutsche Bildung. Some local banks are flexible in this regard (Sparkasse Essen and Sparkasse Herford). And there are some offers that specialise in study programmes abroad: for example the new LL.M. Education Fund offered by Brain Capital that makes it possible for law students to finance a Master’s degree abroad. Students of all disciplines can apply to the Deutsche Bildung for up to 25,000 specifically for a study programme abroad. Future repayment depends on income (a fixed percentage rate of gross income). Mr Müller said: “A new EU-funded loan has been announced for the autumn for funding a complete Master’s programme abroad. The offer is wide and makes it possible for students who are not covered by existing offers to think ‘outside the box’.”
The CHE Student Loan Test 2014 was compiled and published in co-operation with the Handelsblatt newspaper. Based on 21 criteria, it assesses the advantages and disadvantages of existing student loan offers with respect to different target groups and helps interested students make the right decision for themselves.
Further Information can be found in the publication stated below.