KfW

Not being able to provide an audit. Tobias Thiele is the first in the family to do this. Financially, he has to finance his studies at the University of Augsburg largely on his own. The parents’ money is not enough to adequately support the 24-year-old. “My parents can only give me 100 euros per month to pay rent and bills ​​​​with child benefit, unfortunately they can’t give me more,” says the computer engineering student.

For BAföG, ie the social benefit that comes from the Federal Tuition Assistance Act, parents are earning too much. Both work in the social sector. They give what they can: a rent subsidy of 100 euros, child benefit, insurance and emergency funds.

Financial problems due to rising interest rates

Tobias Thiele found the right solution four years ago with a student loan from KfW Bank. At first he was paid 600 euros per month. But now only 330 euros ends up in his account every month. The reason: His interest rate has increased and the accrued interest is taken out every month. This has created a huge financial gap for the student.

And he’s not the only one affected. The current financial hardship is driving students to student union credit counseling centers. Tobias Thiele is also hoping to get help from the council center in Augsburg. Michael Noghero, who works as head of department there, knows the concerns of many students who cannot afford to study anymore. He also sees that the reason for this is the borrowers’ lack of information.

Undisclosed financial results

The consultants believe that the big problem with the KfW product is being able to take out a loan quickly online: “The mistakes were partly the fault of the students because they were stupid when they took out large loan amounts. But you also have to say: the KfW student loan is also very opaque because it works with flexible interest rates,” said the consultant.

The interest rate is changed twice a year. Instead of 4.2 percent as when he took out the agreement, Tobias is now paying an effective annual interest rate of 7.51%. In the meantime it was even nine percent.

Tobias Thiele expected the loan to cost around 40,000 euros. As things stand now, it could be around 60,000 euros. The advisors can hardly offer other options: in individual cases, scholarships for one or two semesters or a degree loan. Rainer Thiele’s father is worried about his son’s future mountain of debt: “If you think about when he will be finished and if you look at the debt he will leave, you worry about what will happen next. Can he pay himself back or do we have to step in again.”

When the money is not enough anymore

Sociology student Magdalena Lettenthaler from Munich is also feeling the effects of the unexpected rise in prices. She uses the loan to finance her rent, among other things. She shares a 50 square meter apartment with her boyfriend for 1,200 euros.

BAföG was out of the question for her. That would never have been enough for her in expensive Munich: “You’re only allowed to work up to the minimum job level and I knew that wouldn’t be enough for me and I had to work even more so during this period. then.” Your solution: a KfW loan. During the Corona period, this was particularly attractive with 0% interest. The federal government covered the interest.

During the pandemic, the loan was attractive to many

With the financial injection of the federal government from 2020, there was hype for the financial result: more than 40,000 students took advantage. With the loss of funding and rising interest rates, students increasingly turned their backs on him.

But for Magdalena Lettenthaler it was too late: after the funding stopped and interest rates rose at the same time, her pay rate also decreased significantly. The loan becomes a permanent problem for them, as well as other students. The comments in rating portals show the distress. He says something like: “It’s better to work more and have a worse qualification than to start your career up to your eyeballs in debt.” “

While you study, work for the loan

Magdalena Lettenthaler now has to work 20 hours a week to finance her studies. She really wanted to pursue a master’s degree after completing her bachelor’s degree. But this dream is in danger of falling apart: “I don’t think I can do my master’s degree now. I definitely wouldn’t continue with the loan because the amount is just too high for me right now, even if it was just for. year.”

Computer science student Tobias Thiele now has to work more together with his studies. Fortunately, that works out very well for him. He was able to start directly at the university at the Institute for Software & Systems Engineering as an assistant scientist in the robotics laboratory. With other students, he spends about 65 hours a month working on important AI solutions for the future. “Without a job I couldn’t continue studying, that wouldn’t be possible now,” said the student.

Student loan debt trap

The problem: Because of the high costs, some only study up to a bachelor’s degree. In his area, students can easily get a job in business or industry, even with a lower degree or even without a degree. However, this is a great loss for German science: there is no qualified young talent. Tobias wants to go through, even if he was also on the verge of giving up: “But then I was so close to getting my bachelor’s degree that I said, I will definitely finish my degree and then I will have the choice – I will. continue to study and do I go into debt or do I just go back to work with my degree to get rid of the loan?”

For Katrin Thiele’s mother, her concern is also mixed with disappointment: “So if families like ours don’t get BAföG, I think that’s sad because we’re really in the lowest wage range. “

Improvements to BAföG

Many people fail with BAföG because of the administrative effort and, like Tobias Thiele, because of their parents’ income. The BAföG change, which should come in the next winter semesteraccording to the draft law, wants to improve some points.

That’s how it should be Check out a start-up grant of 1,000 euros for young people from families receiving social assistance. Students should be given a flexible semester beyond the normal study period. Parents’ allowances should be increased by five per cent and student allowances should be increased up to the new minimum working rate. In addition, the procedure should be simplified.

Weak points in the system

For Magdalena Lettenthaler and her friends, the proposed changes to change BAföG do not go far enough. Especially in an expensive city like Munich, there are hardly any students who don’t have to work for a living. Selin Türkoğlu from the Munich student council wants a “parent-dependent BAföG” as well as lower bureaucratic barriers, while her colleague Raffaele Gelo believes that the rent subsidy should be higher than 250 euros .Because this ignores the reality in Munich: “Real rent is much higher and generally only 936 euros because the maximum is just not enough money.”

Magdalena Lettenthaler would never have thought that her time studying would be so work-intensive: “I would have thought that I would have much more free time, but unfortunately that was not possible because I had to work a lot to do it on the side and then that was no longer possible.” Soon she did it. The sociology student is currently writing her bachelor’s thesis. It will be ready in the fall. Then there is she hopes to find a job that pays well so she can repay the loan.