Corona crisis drives demand for student loans

Students in a library, about dts
Students in a library, about dts
In the corona crisis, the demand for student loans rose sharply.

The “Handelsblatt” reports, citing the new annual student credit test of the CHE Center for University Development. Above all, the market leader, the state-owned KfW development bank, reports that applications have tripled in May.

The expectation is that “demand will continue to rise” in the coming months. A total of eleven of the 51 providers surveyed report increased demand. These include the second state provider, the Federal Office of Administration, the Kuhlmann Foundation and German Education. The Studentenwerk Mannheim reports an increase of 20 percent. In 2019, the number of new applications totaled 33.000 ?? that was half as many as in 2014. “In the meantime, part-time jobs and family support have become the cornerstones of student finance,” reports Ulrich Müller, a credit expert at CHE. “This is why a corona-related economic downturn now hits students twice as hard because both part-time jobs and the support of parents are threatening to break away.” KfW grants more than 80 percent of student loans. Most recently, the federal government set the KfW loan interest rate to zero for one year. “The state-perceived product has displaced almost all serious competitive offers, but is itself not optimal? neither suitable for everyone nor completely attractive, ”criticized Müller. In the medium term, however, the students are not well served: “In the current emergency, they are lured with a zero percent interest rate. At first glance, this seems generous, but when you take a closer look, it looks more like a decoy offer. ” Because from April 2021, the usual “not exactly attractive interest rate” will apply again, which was the most effective of all providers at 4,36 percent.

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