Student loans: Spoiled for choice in the student finance

Student loans: Spoiled for choice in the student finance

Student financing is many. But few are accessible to all. In addition to study funds mainly government loans are needed.

Not always enough family income to fund the study of the offspring. Is that enough student loans either, external sources must be tapped. The banks have largely withdrawn from this business. Nevertheless, there is a wide range of student loans and education funds. Only 39, the Center for Higher Education Development (lists CHE ) on its annual study, which was awarded in 2015, more than 50,000 loans.

The largest lender is, therefore, the state. Almost 95 percent of contracts accounted for the student loan the state bank KfW and the educational credit by the Federal Office of Administration (BVA). Especially in demand is the KfW deal, even if it is one with an interest rate of currently 4.71 percent already to the more expensive offerings. For this, after the funding, KfW offers a grace period of up to 23 months. In addition, the repayment over 25 years may be at a minimum rate of only 20 euros. Maximum there are only 650 euros per month.

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Another advantage of the KfW loan that this principle all students can apply. The majority of offers is limited in any way. So there are a number of regional offers, especially student unions. Other programs are higher education or study program, such as the MBA Education Fund of the provider Brain Capital or the student loan of pharmacists and doctors bank.

In addition to the KfW credit only three other programs for all students

Most importantly, the majority of programs for examination candidates is intended. This also includes an interest rate of currently 0.87 percent very favorable educational loan of BVA. Some student unions offer interest-free loan completion as well as private foundations. These include the EW Kuhlmann Foundation, which has the same two programs on offer.

In addition to the KfW credit, only three other programs are available to all students including freshmen open end. This is one of student education funds of Deutsche Bank ( DKB ). According to CHE However, this is not a fund in the strict sense. The DKB himself speaks of a student loan, which is currently an interest rate of 6.49 percent. Secondly, there are the education funds of providers CareerConcept and German education. The concept of education fund is to invest the money of investors in the promotion of students. In addition to cash benefits, some vendors are striving to make the student support bestowed on the study and career planning.

“Knowledge Plus”, this program is called as offered “German education,” which includes many events for application training and exam preparation, as well as stress management seminars. The offer of these services is also in the interest of the fund operator. Swiftly and students in the application process was training clients to come more quickly and smoothly into a well-paid job, which again benefits the investors.

For the repayment of these loans is dependent on income. At Deutsche education over three to ten years to repay three to ten percent of gross income, the education funds of the provider CareerConcept four to ten percent over four to eight years. The amount depends on the level of production and the field of study. Therefore, one can also make any general statement about the cost of loans. Providers have capped the maximum interest rate in general. When Festo Education Fund for technical and scientific studies about the maximum effective interest rate of the loan is 12 percent, while other funds have similar limits.

About half of the requests time out by students themselves

More than 1,400 contracts were signed in 2015 with Education Fund, more than 40 percent were attributable to the German education, making it the fourth largest provider of student loans. Also currently the entrance to online inquiries is extremely high. “September is the hottest month for us,” says Executive Ulf Becker. “We get a day currently around 50 financing requests.” About half of the requests but usually canceled by the applicants.
The student planning horizon is short, it said, conditions such as rent or place of residence changed quickly.

Applicants who pass through the application process, receive in most cases within two to three weeks an offer. The advice intensity is high there. Overall, it is also a promotion of only about one in the thirteenth request. “But that’s okay,” says Becker. The grant recipient usually comes from “financial distant” households, says Becker. “It is often the first students in their families, disproportionately are migrants.”

The variety of student finance offers is great. While the rates of education funds are still manageable, there are in credit offerings in addition to KfW and BVA many in the most different and limited in different ways programs. For example, applicants have to rely on financial assistance for one Daka loan student works NRW in securing their livelihood.

In addition to interest rates and the funding, limits differ. Thus, to obtain from the Federal Office of Administration as an education credit at most 7,200 euros from KfW up to 54,600 euros. But the bulk of the deals is independent of the student loan funding. The loan financing is still only a supplementary means, writes the CHE. Only should be exploited with little or no repayment obligation all possibilities. A study-the near side job could also be a plus for their careers and thus more useful as a loan.