What student loans really offer: More than 40 offers tested by CHE in student loan test
CHE and “Capital” publish first comprehensive rating / Substantial differences in costs, risk limitation and financing volume / Tips for students
By now, more than 40 banks and saving banks have been offering custom-tailored student loans for students. Most striking are the differences in costs, risk limitation and financing volume. This is the result of the first comprehensive comparative test of student loans in Germany which was conducted by CHE and published in co-operation with the German business journal “Capital” (edition 11/2006).
In the group of available loans in Germany, costs at Dresdner Bank are comparably high. With regard to this criterion, Deutsche Kreditbank and the offer of KfW Förderbank come off fairly well. Among all the offers aiming at the financing of tuition fees, loans covering tuition fees in Hamburg and Lower Saxony show good results with regard to costs. However, as for risk limitation they only take a medium position. With regard to loans by the Länder for the financing of tuition fees, BAföG (the national student support system) bank loan receivers in Baden-Württemberg, Lower Saxony and North Rhine-Westphalia profit from the opportunity to get a subsequent loan remission, in case a certain amount of debts had been exceeded. Berliner Bank, Berliner Sparkasse and L-Bank Baden-Württemberg showed bad results with respect to risk limitation.
CHE experts have examined student loans with respect to five key questions: What are the overall costs? Will the student, although receiving a student loan, be further dependent on his parents, since the amount paid off is low or respective securities are required? Is there a debt risk limitation, for example by fixed interest rates? Are changes in subjects and locations, internships and semesters abroad possible? And: How simple is it to get the loan? In order to answer these questions, a total of 15 indicating factors were examined.
According to the CHE evaluation, one cannot answer the question for the best overall offer in a sweeping statement. The offer by KfW Förderbank, for example, comes off well in many categories; however, payment is put on hold during periods of study abroad if the student is not enrolled at a German higher education institution during that period. In contrast, the offer of Dresdner Bank is fairly expensive but much more flexible than other offers and may be extended for semesters abroad. “Depending on the individual situation and plans, offers are of varying appeal”, says project manager Markus Langer. “The individual student is placed best to decide for himself whether he prefers low costs or an effective risk limitation.” Apart from the loan comparison, the CHE student loan test also comprises tips for different student types.
According to CHE, the comparison of loan offers shows that the tuition fees envisaged in many German Länder are to a great extent socially cushioned. A decrease in student numbers must therefore not be feared, thinks CHE director Detlef Müller-Böling: „Meanwhile we have an astonishing range and variety of interesting loan models – therefore I do not think that the number of first-year students will decrease due to tuition fees.”
Further Information can be found in the publication stated below.