Student loans are becoming expensive
SPD demands reversal of high KfW interest rate increase
November 4, 2023, 6:56 a.m
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For some time now, students have been able to use KfW student loans to finance their studies. However, the terms of these loans are worse than many real estate loans, especially after the recent adjustment. The SPD speaks to the conscience of the development bank.
The SPD parliamentary group is calling for the reversal of the interest rate increase for student loans from the federally owned development bank KfW. “We call on the KfW to examine alternative solutions so that students do not get into financial difficulties,” said the education policy spokesman for the SPD parliamentary group Oliver Kaczmarek to the “Augsburger Allgemeine” according to the preliminary report.
In addition, FDP Federal Education Minister Bettina Stark-Watzinger must push forward the BAföG reform quickly. “This is the only way many students can be helped not to get into unnecessary debt,” emphasized the SPD politician. The chairman of the board of the German Student Union, Matthias Anbuhl, called the interest rate increase to an effective 9.01 percent a “socio-political scandal”.
Impending debt trap
According to Anbuhl, the interest rate is currently twice as high as for a real estate loan. “It’s quite adventurous: the interest rate on student loans from a public development bank is rising to dizzying heights,” said Anbuhl. “Students can currently only be advised to be extremely careful when it comes to KfW student loans. There is a risk of a debt trap.”
The Union accused the federal government of abandoning many of the 85,000 students who had taken out a state KfW student loan in the past four years. “This is a huge problem for a number of students who are literally being hit with an interest rate hammer,” said the education policy spokesman for the Union parliamentary group, Thomas Jarzombek, to the “Augsburger Allgemeine” newspaper.
“Young people have fallen into an interest rate trap without their knowledge,” criticized the CDU politician. The interest usually also increases the monthly repayment rate. “Every time you buy a property, a car and even an electrical appliance, there is a fixed interest rate – but not with student loans,” Jarzombek criticized the construction of student loans.