Student Loans in Germany and other useful ways to finance your studies
Looking for a student loan in Germany?
Whether you are planning to participate in a MBA program in Germany or complete your Master degree or dissertation and post doc project there, you will probably need financial support to reach your goals. The tuition fees might depend on the county you are studying at and whether you are a citizen of the European Union. The following paragraphs will give you basic information on the opportunities you have on financing your studies in Germany and outline the various student loan models.
If you have good German language skills and some experience it should not be very difficult to get a job in big cities like Munich or Berlin. If you are planning a study in a smaller city though getting a job could become quite a problem, on the other hand your living expenses will be much lower. Whether it would be a bar, a restaurant, or if you are lucky, an international company you should keep the following things in mind when planning to work part time as a student in Germany:
- Studying in Germany is not easy, and the lectures take up a lot of time. You will also have to take care of organizing everything around your application, housing, transport, health insurance and visa.
- Earning enough to finance cost of living and tuition fee won't be easy and usually leads to lower grades and you needing more time to complete your studies.
- Students usually earn about 10 Euro per hour. Even if you manage to work full-time (5 days a week, 8 hours a day) you still end up with about 1.600 Euro per month, so even after 10 months of hard work you will still only be able to cover one third of your financial demand for your studies. You should also keep in mind that students coming from outside the European Union are only allowed to work 90 full days per year or 180 half days.
- You may need a work permission or a visa depending on your citizenship.
- As a student you are not allowed to work more than 20 hours per week during the semester, and you are only allowed to work full time during semester vacation.
- You will need health insurance to work in Germany, which usually costs about 60 Euros per month.
- If you earn 400 Euro at maximum per month, you are free of paying social tax or pension insurance. If your monthly income does not exceed 800 Euro you do not have do pay the whole tax.
- Your part-time job earnings might reduce the amount of BAföG you are eligible for as a foreign student. You also have to keep in mind, BaföG is pretty hard to get as a non-German citizen, and you have to organize and get all the needed documents on your own.
- If you plan on opening up your own business, you should keep in mind that you will have to prepare a tax declaration each year and present it to the local tax office, and you have to pay the whole tax.
BAföG for foreign students
You can apply for BAföG if you fulfill the criteria of §8 BaföG law. Basically the paragraph says that foreign students can receive BAföG in case that they have already lived in Germany for some years or plan to stay in Germany for a long period of time. For EU-citizens it is usually much easier to apply for BAföG than for non-EU citizens. Furthermore you have to be younger than 30 years at the beginning of your studies. Your application will be verified regarding your and your parent's earnings. If your own property is above 5.200 Euro or your parents earn more than the criteria in §24 BAföG law allows, you are not eligible to receive BAföG. You can find various BAföG calculation tools in the web and get further information at the BAfög office at your student union. Keep in mind that you will have to repay 50% of the disbursements you have received on an interest-free base. You have to start repayment for the loan-part 5 years at latest after finishing your study.
Some organizations offer special scholarships for foreign students. Unfortunately most of the programs cannot cover all of your expenses for cost of living and tuition fees and have very high criteria for the applicants.
You can find further information on the following website:
Student loans in Germany are offered by the state as well as by institutions and banks (private student loans). Some offerings only cover tuition fees for German state universities, others finance tuition fees for private universities as well as cost of living. To receive a loan as foreign student you might need a guarantor in some cases, who can guarantee for the repayment of the loan. Banks and other financing institutions expect that you will work in Germany or EU after finishing your study. You might also need a certificate of SCHUFA (creditworthiness check).
When you have found the right student loan, you can apply online or directly in the bank branch in your city. After verification of all the needed documents (like e.g. enrollment documents, CV, last exam grades etc.), the bank will prepare an educational grant agreement for the loan. After signing this agreement disbursements can start on a monthly or semester-wise base, or even as one time payment. Depending on the interest payment model, disbursements can be reduced by the interest costs right from the beginning or interests are granted until repayment phase starts (after you have graduated and found a job, which is more expensive). Repayment period depends on your finances as well as on banks' student loan criteria.
- Private student loans are offered country-wide e.g. by Deutsche Bank and Deutsche Kreditbank (DKB). Some banks of Sparkassen Group or Volksbanken/ Raiffeisenbanken offer regional loan programs as well.
- State student loans in Germany are offered e.g. by: KFW Bank via your regional bank, NRW. Bank (only tuition fees), L-Bank (only tuition fees).
- Private education funds (so called ‘Bildungsfonds’): CareerConcept and Deutsche Bildung
- Education funds offer to qualified and highly motivated students, funding for both cost of living and tuition fees. Repayment is income-based instead of interest-based, which means that after a successful application the fund determines a fix percentage rate of your gross salary per month which you will have to pay back over a determined period of time (usually between 4 and 5 years). Depending on your salary after graduation you may pay back more, the same sum, or even less to the education fund. This type of student loan is perhaps the most secure, because repayment always correlates to your financial status and the salary you get.
Before you apply
- Financing your tuition fees: You have to pay tuition fees only in Niedersachsen. See Tuition Fee Map .
- Living expenses: The cost of living depends greatly on the city in which your university is situated. You should consider 750 Euros per month. For more information on cost of living check our ‘Finanzbedarf-Check’ tool (basic German knowledge required). This article might also be very helpful: Young-Germany.de.
- Applying for a student loan in Germany: Some banks offering student loans have a comprehensive application process and require the completion of an Assessment Center. Only few of them offer financing for your postgraduate degree or a second bachelor degree.
- Repayment plans and interest rates: Student loans differ in repayment plans and interest rates, so make sure to check which one suits your personal situation best.
- Age restrictions:Most institutions offering student loans have age restrictions and do not finance studies beyond the average number of semesters for your degree (usually funding is offered for 12 semesters plus 1 more semester).
- Annual Interviews and Certificates: Keep in mind that some banks require annual interviews with the local banking consultant, an enrollment confirmation as well as a print out from your latest exam scores.