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Rising Interest Rates on Student Loans Draw Criticism from the Federal Government

Over 100,000 student borrowers have been hit by soaring interest rates, drawing criticism from the federal government.

Increase in interest rates on student loans.
The Reconstruction Loan Corporation (KfW) reports that more than 100,000 student loan recipients have been affected by the sharp rise in interest rates. According to an unpublished response from the federal government to a request from the left, around 102,000 repayers are currently paying between five and seven percent interest on their student loans. With a good 67,000 people affected, it is even more than seven percent.

effects of the corona pandemic

The total amount is more than two billion euros. During the corona pandemic, the loan from the state development bank was interest-free, which caused the number of applications to rise to over 49,000 in 2020. The interest-free phase ended in October 2022, after which the effective interest rate rose to over six percent. The interest rate is currently 7.82 percent.

criticism of the government

Left-wing MP Nicole Gohlke criticized the federal government with the words: “The federal government is deliberately letting tens of thousands slip into the debt trap”. She demands that the federal government should assume part of the interest burden. The Federal Government replied that the structuring of the loan conditions is in principle the responsibility of KfW and that no other support for the borrowers is currently planned.

2023-07-28 14:15:43
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