Student loans - better than you think
Student loans are to become a fixed element in higher education funding as a supplement to traditional funding forms, says Ulrich Müller.
Speaking in the Handelsblatt newspaper about current student loan offers, Mr Müller also says higher education institutions will be expected to act as contact points for students with questions about how to finance their studies.
Ulrich Müller in the Handelsblatt newspaper on current student loan offers
Handelsblatt: Mr Müller, you have recently examined approximately 40 loan offers for students. What is your general assessment of the market?
Ulrich Müller: Given the fact that the market has only really been developing over the past 12 months, what is currently on the table is really good. There are lots of models on offer, from which students can choose the one that suits them best. But I would expect there to be fewer rather than more loan providers in the future.
Handelsblatt: How will higher education funding develop in the future?
Ulrich Müller: We will not have the same situation as in the USA, at least in the medium term, i.e. there will be hardly any students with debts of 50,000 euros at the end of their studies. Nevertheless, loans will become a fixed element in higher education funding, supplementing traditional funding forms such as working, Bafög bank loans or parental
Handelsblatt: Which students are most likely to benefit most from loans?
Ulrich Müller: Student loans finally close the "middle income gap", helping mainly those students who do not qualify for a Bafög bank loan but whose parents cannot or are not willing to support their studies.
Another benefit is that loans allow students to concentrate on their studies or possibly finance a period abroad or practical work placements.
Handelsblatt: The loans are often considered to be expensive?
Ulrich Müller: In this respect the offers are better than they are made out to be. Interest rates remain within the limits.
Handelblatt: Which loans are the best ones at the moment?
Ulrich Müller: That's much too general a question. Students must first know what they need the money for. Whoever needs to use the loan to finance living costs should probably opt for the KfW offer. On the other hand, the Dresdner Bank loan is particularly flexible and could be used to finance a study period abroad. If it is a question of covering tuition fees, then the offers made by the Länder are worth recommending.
Handelsblatt: Where can students get advice on choosing the right loan?
Ulrich Müller: Studentenwerke offer finance consultations. However, higher education institutions themselves should also take on more responsibility in this area in the future and advise students on how to finance their studies. Alternatively, students can find out their own information by contacting loan providers directly. Our student loan test can help compare the different types of models on offer.
The interview, carried out by Patrick Mönnighoff, was published in Handelsblatt on January 18th, 2006.