Karliczek: “We support students in need”

Federal Education Ministry provides interim aid for students in financial distress due to the pandemic

The coronavirus pandemic poses a financial challenge for many students. Two-thirds of students in Germany work alongside studying for their degree. Many of them have lost their jobs as a result of the ongoing coronavirus pandemic, causing them financial difficulties. The Federal Ministry of Education and Research (BMBF) will provide interim financial help for these students. Federal Education Minister Anja Karliczek explained:

“Many students have lost their jobs as a result of the coronavirus pandemic. These students are now faced with financial hardship. A huge number of students work in addition to studying. Around two-thirds of students in Germany work alongside their degree, for international students this number is even higher – around three-quarters. Many of these students will now be able to apply for additional funding under the Federal Training Assistance Act (BAföG) to compensate for their lost income.

However, this issue also affects students who are not eligible for BAföG support and who do not have any other form of income such as a scholarship or an Erasmus grant. If they lose their income now, many of them will be faced with financial problems.

Over the last few days, I have received letters from students describing their distress during these exceptional circumstances. It is very important to me to make sure that these students are given rapid access to interim financial aid. We cannot stand by and allow the coronavirus pandemic to drive students to interrupt or abandon their academic studies.

In the Federal Government and the coalition, we have spent the last few days intensely discussing possible solutions. I am very glad that, today, we are able to announce a well-balanced plan to help those in need. It acknowledges that other forms of support are necessary given the unusual situation. At the same time, it also makes allowance for the financial burden on future generations.

Not all of the students concerned are able to pick up work opportunities to make up for their previous income at such short notice. These students now have the possibility to apply for an initially interest-free loan from KfW.

This measure capitalizes on the well-established KfW student loan, which, in light of the expected prolonged duration of the crisis, is currently offered interest-free until 31 March 2021. This is available both to new applicants, applying after 8 May, as well as for students receiving payments under existing loan arrangements for the period between May 2020 and March 2021. We will open up the student loan to those international students who are particularly affected by the current crisis from July 2020 until March 2021.

In specific terms, this means that students can apply for an interest-free loan from KfW from the beginning of May. An interest-free loan of up to €650 per month is available. The loan can be obtained through an unbureaucratic online application. This is a fair, quick and effective opportunity for students affected by the pandemic. I am very grateful to KfW for their support. This gives the students concerned access to a tried and trusted instrument, ensuring that interim financial aid will quickly reach those who need it. In total, this will enable the lending of up to €1 billion.

In addition to the financial support from KfW, we will also provide the German National Association for Student Affairs (DSW) with €100 million to be put into local student services emergency funds. This money will be used to help those students who can prove that they are suffering from particularly acute hardship, who need immediate help and who do not have access to other forms of support. I would like to express my sincere gratitude to all the student services staff throughout the country for working so hard to support our students.

This measure complements the other initiatives that have already been launched by the Federal Education Ministry to support students in the unprecedented situation we now face. We have already implemented numerous relief measures related to BAföG and scholarships from the German organizations for the promotion of young talent (Begabtenförderungswerke). These provide support not only for existing BAföG recipients, but also for new applicants in particular. The new aid measures are open to all other students.”

Dr Günther Bräunig, CEO of the KfW group: “Since its introduction in 2006, the KfW student loan has enabled people to obtain a university degree, regardless of their financial background, thus playing an important role in increasing social equality in education in Germany. In difficult times, this support is more important than ever before. Thanks to the loan’s initial interest-free phase, all students who receive KfW student loan payments can commence or continue their course of study during the coronavirus crisis, even if their part-time work dries up or they receive less support from their parents, who are probably faced with similar difficulties.”

Achim Meyer auf der Heyde, Secretary General of the German National Association for Student Affairs (DSW): “We are especially pleased to see that the Federal Government, and in particular Federal Minister Karliczek, has agreed to provide emergency aid for students. We will now work together with the Federal Ministry of Education and Research to swiftly develop a process for the practical implementation of these aid measures by the student services associations. We are very confident that this aid will quickly reach the students affected.”

Background:

The KfW student loan is a well-established programme offered by the KfW banking group. Launched in 2006, it gives students the opportunity to take out a loan of up to €650 per month. In principle, all students aged 18-44 who are enrolled at a state-recognized institution of higher education in Germany and fulfil one of the following conditions are eligible for a loan:

  • German citizens who are registered as living in Germany
  • Dependants of German citizens who live with them in Germany and who are registered here
  • EU citizens who have been lawfully residing in Germany on a permanent basis for at least three years and who are registered here
  • Dependants of EU citizens (who fulfil the above criteria) who live with them in Germany and who are registered here
  • Non-nationals who have acquired their university entrance qualifications in Germany and are registered in Germany

For the purposes of the interim financial aid, the group of recipients eligible for the standard KfW student loan will be expanded temporarily. This will allow international students – third country nationals and EU citizens who have only recently moved to Germany – to take advantage of the initially interest-free loan.

Applications for the interim financial help in the form of an initially interest-free loan can be made to KfW from 8 May 2020. International students will be able to apply from 1 June 2020. The standard application procedure must be followed (for more information see: www.kfw.de/studienkredit-coronahilfe). In principle, the general terms and conditions of the KfW student loan with a maximum monthly payment of €650 are to apply. The reduced interest rate is guaranteed until 31 March 2021.

The loan is subject to the same repayment terms as standard KfW student loans. No repayments are due during the grace period, which lasts for 6 to 23 months after the payment phase.

Financial support from the student services emergency funds will be given in the form of a non-repayable grant to students who are suffering from particularly acute hardship, in accordance with the customary strict regulations governing the respective fund.