The KfW loan for students is becoming cheaper. As of April 1st, the interest rate for newly concluded contracts fell from 9.01 percent to 7.51 percent. How high the interest is on student loans that are already in progress depends on the individual case and when they were taken out. According to the information, all borrowers benefit from the decline in the reference interest rate.
The interest rate for the student loan is reset every six months on April 1st and October 1st. The reference interest rate - the so-called six-month Euribor - reportedly rose significantly after Russia's war of aggression on Ukraine, which made student loans more expensive.
The loan has therefore become significantly more expensive in recent years. In October 2021, the interest rate was 3.76 percent. Borrowers pay an average of 80 euros in interest per month, up from 32 euros in 2018, as a response from the Federal Ministry of Education to a request from the Left showed in the fall.
German Student Union: Interest rate “still far too high”
KfW student loans are not paid out in one lump sum, but rather monthly. There is a maximum of 650 euros per month for a maximum of 14 semesters. The maximum amount is therefore 54,600 euros. After the last payment, an 18-month waiting period begins, followed by the repayment phase. There is a maximum of 25 years for repayment. Interest is usually due over the entire period from the payout phase to the repayment phase.
more on the subject
Expensive KfW loans: Students pay up to 225 euros in interest
Parents as a fallback: Only a small proportion of students receive support from the state
High profit from the state development bank: Union calls for a reduction in interest rates on student loans
The German Student Union (DSW) welcomed the reduction in the interest rate. However, CEO Matthias Anbuhl described the current level of 7.51 percent as “still far too high”. Students must continue to be “clearly advised against financing their studies exclusively through the KfW student loan. The debt risk is and remains high," said Anbuhl. Instead, it is important to strengthen student loans, “the heart of state student financing.” This urgently needs to reach more students again.
olb/dpa