A significant decline in student loan demand has been observed over the past decade, with new loan disbursements plummeting to just under 13,000 in 2024. This figure represents a stark contrast to the nearly 60,000 new loans issued in 2014, according to a recent study by the CHE Centrum für Hochschulentwicklung, as reported by “Handelsblatt”.
The study highlights a concerning trend, particularly regarding new loans from KfW, the state-owned market leader, which are “approaching the zero point”. Ulrich Müller of the CHE management attributes this development primarily to “unattractive conditions” specifically citing the current interest rate of 6.3 percent.
The German government, as stipulated in the current coalition agreement, has expressed a commitment to securing “fair conditions” for student loans and exploring options for fixed-rate products. However, the timeline for implementation remains unclear, with officials from the office of Research Minister Dorothee Bär (CSU) declining to provide a response to inquiries on the matter.
The impact of this decline is affecting students directly. “Since non-state providers can only fill the gap sporadically, many students are left disadvantaged” Müller stated. He cautioned that the current situation risks forcing students into part-time employment, extending the duration of their studies and potentially leading to study dropouts.