Government provides emergency loans to hard-up students

Germany’s coalition government will provide emergency loans for students whose source of income is threatened by the coronavirus pandemic but who are not entitled to federal grants.

Around two-thirds of all students depend on part-time jobs for all or at least part of their income. The share of international students depending on such an income source is even higher.

The coronavirus pandemic has resulted in a current 10.1 million people on short-time work and a total of 2.644 million unemployed in Germany. Thousands of students previously working part-time in various sectors, in particular catering, are facing financial hardship.

The Christian Democrat, Christian Social and Social Democrat coalition government is introducing an emergency support measure for students who are not eligible for support via the federal student grant system, the Bundesausbildungs-Förderungsgesetz or BAföG.

From 8 May, German students will be able to apply for an initially interest-free loan at the KfW, formerly the Kreditanstalt für Wiederaufbau. The KfW was formed in 1948 as part of the Marshall Plan to support post-war Germany. It is now a government-owned development bank.

Loans will comprise up to €650 (US$705) a month and will be available interest-free for German students up to March 2021. International students can apply for the loan as of July 2020.

Applications can be submitted via an online form, and the loans only become repayable after a subsequent 18 to 23 months.

Federal Education Minister Anja Karliczek, a Christian Democrat, is reckoning with a total loan volume of up to €1 billion.

In especially urgent cases, students can apply for non-repayable subsidies at their local branch of the Deutsches Studentenwerk or DSW – the German National Association for Student Afffairs. For this purpose, the government is providing the DSW emergency fund with an extra €100 million.

Less than impressed

“Making more students eligible for BAföG support would have been equally desirable, but could not be realised because of the federal minister’s ideological opposition to the idea,” commented Oliver Kaczmarek, the Social Democratic Party spokesman for education. The party has been pressing for more support via the BAföG system.

Kambiz Ghawami, head of World University Service Germany, said: “The package presented by Education Minister Karliczek for supporting students facing hardship through no fault of their own is just an abortive attempt to revive the KfW student loans, which have been a non-seller for years.

“And given that around one million students are now running into financial crisis, announcing a contribution of €100 million to the DSW emergency fund boils down to €100 available per student.”

Ghawami maintains that only around 20% of Germany’s nearly 400,000 international students receive grants, while the rest depend on part-time jobs and money provided by parents. In several cases, he explained, support from parents has ceased owing to millions of job losses in Africa, Asia and Latin America and lack of government compensation payments in these regions.

“Now that Germany’s federal government here has totally failed, we need the support of the ministries at state level to boost the various state emergency funds to assist international students facing hardship through no fault of their own,” Ghawami maintained.

Contact writer Michael Gardner on: michael.gardner@uw-news.com