Monthly interest charge for student loan almost tripled
On average, borrowers pay almost three times as much interest per month for a KfW student loan as they did five years ago. This is shown by data from the state development bank published by the Federal Ministry of Education at the request of the Left Party. In 2018, the average monthly interest payment was around 32 euros, now it is around 80 euros. The ministry's response was made available to Deutsche Presse-Agentur.
On average, borrowers had paid a total of 1,300 euros in interest when repaying the student loan in full in 2013, now it is 2,700 euros. The ministry pointed out that the amount also depends on the chosen term and the amount of the loan. Until 2021, there were rather short-term loans.
176,000 loans paid off
However, the KfW student loans themselves have also become significantly more expensive. In October 2021, the interest rate was still 3.76 percent. KfW last raised it to 9.01 percent on October 1, citing the rise in the European reference interest rate Euribor as the reason.
According to the government's response, as of November 8, almost 40,000 people were in the disbursement phase and 40,000 in the waiting phase, with 176,000 paying off their loan.
The number of loans applied for fell significantly. In the current year, around 8,800 applications for a KfW student loan were submitted by the beginning of November, compared to 16,600 in the entire previous year and 24,800 in the year before that. During the coronavirus period between May 2020 and September 2022, however, the federal government also assumed part of the interest as a relief measure.
Nicole Gohlke, education policy spokeswoman for the Left Party, criticized the development: "Stop the interest rate madness and give us an instrument that works: The Bafög must be made a living wage as soon as possible," she said in view of the figures. The KfW student loan had not only become unattractive for many, but had also become obsolete as an instrument and was nothing more than a rip-off.
- The rise in interest rates for KfW student loans has led to an increase in the monthly credit payments for students, making education more financially burdensome.
- The Left Party in Germany has criticized the skyrocketing interest rates on KfW student loans, advocating for a living wage Bafög and viewing the loans as an outdated and exploitative financial instrument.
- Despite the high interest rates, the number of KfW student loans applied for has significantly decreased, indicating that many students are opting for alternative means of financing their education due to the financial burden.
Source: www.dpa.com
