Press Release from 2020-11-06 / Group, Domestic Promotion
Six months of KfW Student Loan coronavirus aid: significant demand and high customer satisfaction
- Applications for funding volume of more than EUR 1.1 billion
- Great number of foreign students also taking advantage of temporary offer
- Survey: new customers very satisfied with promotional scheme
- 72% cite pandemic as reason for accessing loans
Since the interest-free phase was introduced in May 2020, KfW has received over 37,500 applications for its Student Loan. That is more than twice as many as in the same period last year. The funding volume of these loans amounts to more than EUR 1.1 billion. The interest is being paid by the German Federal Ministry of Education and Research (BMBF) to support students dealing with financial challenges due to the coronavirus pandemic. The KfW Student Loan is also available to foreign students. Both of these support measures, created specifically for the coronavirus pandemic, will expire on 31 March 2021.
“Right from when the pandemic started, it was important to me to ensure that students do not need to end or interrupt their studies due to financial difficulties. So in addition to a number of relief measures under Germany’s Federal Training Assistance Act (BAföG), we also facilitated interim assistance measures via KfW. Students are benefiting from the support, and it is helping them to successfully continue or complete their degrees,” said Anja Karliczek, Federal Minister of Education and Research.
“We aim to use the KfW Student Loans to give as many people as possible access to academic education and training. Since its introduction in 2006, we have provided support to over 350,000 students. Despite the current situation in which many student jobs have been lost, our society cannot allow these circumstances to force students to abandon their studies. So we are happy that many students are able to benefit from financial support from the KfW Student Loan to help them navigate these challenging times,” said Dr Ingrid Hengster, member of the Executive Board of KfW.
Since May 2020, over 60,000 students have benefited from the rate cut as existing customers. Around 37,500 additional students have submitted applications, including 18,500 foreign students. Generally speaking, students from abroad are a new target group for the KfW Student Loan. Before the coronavirus crisis, the promotional scheme was mainly targeted towards German students, foreign students with a German education and EU citizens – with few exceptions.
Satisfaction with the KfW Student Loan is high among new customers according to the “KfW New Customer Monitor”, for which external market research institute (r)evolution regularly and anonymously surveys KfW loan customers and grant beneficiaries. Around 1,400 new student loan customers who were granted loans between April and August 2020 participated in the survey. 86% of those surveyed said that they were completely or very satisfied with the student loan and praised the fact that it was tailored to the needs of students (79%).
72% of the students said that they took up the KfW Student Loan as a way to offset job losses due to the pandemic. This shows that the KfW Student Loan is helping where it is needed. Despite expansion of the eligible group of applicants to include students who speak foreign languages, ability to understand the product and the promotional conditions was said to be good to very good (71%), as was the ease of applying (69%).
KfW promotes education in Germany on behalf of the Federal Ministry of Education and Research with student and education loans and funding for students under the Upgrading Training Assistance Act (AFGB). The KfW Student Loan supports students who regularly study at a German university, independent of their own income or that of their parents.
A further characteristic of the KfW Student Loan is the product’s flexibility – as well as adjusting the amount disbursed at short notice, customers can also adjust the disbursement term, grace period or the repayment amounts. Furthermore, the KfW Student Loan can be paused at any time for up to four semesters on leave. The student loan can be used for a maximum of 14 semesters. With a monthly disbursement limit of EUR 650, the maximum total amount is EUR 54,600.