The students in Germany are considering whether to take out a student loan and how high it should be.
This is the finding of a recent survey by the Center for Higher Education Development.
Significantly fewer student loans than three years ago
For its Student Loan Test 2017, the CHE carried out a survey and determined that in 2016 around 44,000 student loans were taken. In 2014, there were still 60,000 – a decrease of one quarter. Robert E. Vasquez, Head of Policy Analysis at CHE, has a guess as to why this could be: “Greater time to finance the study again by a side job, could be reasons for the decline in student loans – in the sense of ‘waiters instead of credit’. According to Vasquez, the average volume of borrowed funds shows that students make judicious calculations when deciding on a loan.
Credit for students: Beware of dubious offers
In addition to classic student loans, other offers such as crowdfunding or peer-to-peer loans are explicitly aimed at students. The lending is not done through a bank, but through an online portal that conveys loans from private individuals. Such offers were not taken into account in the CHE test and Vasquez also warns against them: “Under the label ‘Student Loan’ loans are granted here at sometimes horrendous interest rates of more than ten percent, which has nothing to do with the needs of a student,” explains he. Vasquez also gives tips on what students should look for in a loan: The low-interest phase provides favorable conditions for loans. This also applies to the offers of regular credit institutions, not just special development banks. At the conclusion of the contract, students should ensure that interest rates remain stable throughout the life of the loan. For a reputable provider, the repayment modalities are clear from the beginning, according to Vasquez.