Student´s loan. Reconstruction Loan Corporation

Name of the instrument - Local language: Studienkredit Kreditanstalt für Wiederaufbau
Name of the instrument - English translation: Student´s loan. Reconstruction Loan Corporation
Scheme ID: 233
Country: Germany
Reporting year: 2015
Type of instrument: Loan
Type of entry: Single instrument

Short description: Student loan is conducted by distribution partners of the KfW bank in Germany. Eligible for funding are: university studies as a primary and second degree; postgraduate courses and PhD studies. The loan supports the students with at least EUR 100 and not more than EUR 650 per month. The maximum level of financing depends on the number of semesters: 14 semesters: EUR 54 600, 10 semesters: EUR 39 000, 6 semesters: EUR EUR 23 400. The combination of the KfW student loan with other subsidy is possible. The interest rate of the loan is based on a certain reference interest (6-Month EURIBOR) plus a contractually agreed premium.
Short description of the related instruments: nap

Level of operation

National

Name of a part of the country

nap

Name of the region (for regional instruments)

nap

Name of the sector (for sectoral instruments)

nap

Relevance

Key scheme

Legal basis

National law

Objective(s) and target(s)

The KfW Student Loan supports - with no collateral and regardless of income / assets. Its main targets are a broader access to university (in terms of social permeability) and a shortening of study duration.

Year of implementation

2006

Operation/management

The loan is conducted by distribution partners of the KfW. The KfW monitors the process and has the final decision on the loans.
The KfW is the world's largest national development bank. It was founded in 1948 on the basis of the Law on Reconstruction Loan Corporation as an institution under public law. It is owned by the Federal Republic of Germany and by the Länder. Four-fifths of the capital of KfW is held by the Republic of Germany and one-fifth by the Länder. The Federal Republic shall be liable for all liabilities and loans from the KfW. On this basis the bank finances all loan offers.

Eligible group(s)

Students of legal age who are currently enrolled at a State or State-recognised tertiary institution in Germany, who are not older than 44 years on 1 April or 1 October before the financing begins.

Group(s) with preferential treatment

None

Education and training eligible

University studies (Bachelor, Diplom, Magister, Staatsexamen) as a primary and second degree; as well as postgraduate courses (additional, supplementary, postgraduate or Master's degree) and PhD studies. All courses can be full- or part-time.

Source of financing and collection mechanism

National budget/national development bank (current financing - providing loans)
individual (repayment from future income)

Financing formula and allocation mechanisms

The loan´s interest rate is 3.91% (2014). The interest rate is generally variable and includes a reference interest (6-Month EURIBOR) plus a contractually agreed premium. The interest rates are adjusted every the next six months. In order to limit the interest rate risk, a maximum interest rate is guaranteed for a period of 15 years from the conclusion of the contract. From the beginning of the repayment period it is possible to agree on a fixed interest rate for the remaining term of the loan - but not longer than for 10 years.

The loan scheme supports the student with at least EUR 100 and not more than EUR 650 per month (can be changed with every semester). The combination of the KfW student loans with other subsidy is possible, for example, the education credit or BAföG for students.

The loan term of the KfW student loan is divided into 3 phases (disbursement- , closed- and repayment phase): The duration of the disbursement depends on the age: up to 34 years olds receive a commitment for up to 14 semesters; up to 39 years olds receive a commitment for up to 10 semesters; up to 44 years olds receive a commitment for up to 6 semesters. In the subsequent closed period of 18 to 23 months only the payment of the interest is required. In the subsequent repayment period, monthly instalments within a maximum of 25 years or until the age of 67 are to be paid. There is a minimum rate of EUR 20.

The maximum level of financing depends on the number of semesters:
- 14 semesters: EUR 54,600 (14 semesters x 6 months x EUR 650)
- 10 semesters: EUR 39,000 (10 semesters x 6 months x EUR 650).
- 6 semesters: EUR 23,400 (6 semesters x 6 months x EUR 650).

Eligible costs