Student loans in Germany
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German public universities are usually free for students. Giving out student loans and grants is seen as a means to pave the way to higher education for children whose parents can't afford to fund their children's education otherwise. The federal law that regulates these student loans and grants is called "Bundesausbildungsförderungsgesetz" (Federal Training Assistance Act) or "BAföG" [ˈbaːfœk] for short, and the loans, grants, and combinations thereof are usually referred to simply as "BAföG" by students (as in "I'm getting BAföG"). Eligible groups include high school students, part-time and full-time university students, second path education students (i.e., those starting to study after having been in the workforce), and students of schools for professional training.
Eligibility dependent on parent income
The eligibility for student loans is (usually) dependent upon parent income, as parents are required by law to fund their children's education (including higher education), and therefore students could theoretically sue their parents for funds for their education (although this is rarely done for obvious reasons). For low-income families, BAföG loans take over when these obligations can not reasonably be met by parents.
BAföG-loans are usually given out half as zero interest loan (to be repaid only after the receiver exceeds a certain income level after graduation) and half as grant money to university students. High school students get the full amount as grant money if they are eligible. The current maximum amount per month (for a university student) is 585 euros (until Sep 2008, then 643 euros). This can be lowered gradually if student or parent income or student assets exceed certain amounts. Thus the amount paid out can be lower than the maximum amount and even loans of 1 euro per month are given out if the calculation returns that amount. Such low grants seem nonsensical at first, but they are usually accepted by students (loans can be refused by the student), because eligibility for a BAföG loan (even at the minimum of 10 euro per month) makes the student eligible for some other benefits like cut-rate telephone service or waiving of public television licence fees (which otherwise are paid by everyone who manages a household).
Generally, BAföG loans are independent on student achievement or grades at least for two years. After that, a certain minimum grade level has to be met and proof of participation in required, but ungraded courses, needs to be provided to stay eligible. Change of field of study is allowed once during the first two years without becoming ineligible. For university studies, every field of study has predefined a maximum study duration (usually around five years), after which the student becomes ineligible for BAföG. Further funds can be granted as low-interest loan for another two years if certain criteria (like reasonable likelihood that the student will graduate during that time) are met.
To qualify for BAföG, one must generally be a citizen or permanent resident of Germany and/or have lived in Germany for five consecutive years. There are some exceptions.
Other than with BAföG you can also finance your studies with Bildungskredit from KfW, Bildungsfonds, or a Scholarship. However, in most cases to qualify for a private loan, one must have German citizenship, have EU citizenship and have resided in Germany for three consecutive years, or have graduated from a German secondary school.
Eligibility independent from parent income
In some cases, like most notably if the student has worked full-time for a number of years before returning to student status, BAföG eligibility is calculated independent from parent income, because parents' obligation to fund their children's education ends once the children enter the workforce full-time. In those cases, only student income and assets are consulted for BAföG eligibility and amount calculation.