The tuition fees are an apparently insurmountable barrier for many students: contrary to expectations, the recipients are not automatically exempt from tuition fees, which can amount to up to 500 dollars per semester depending on the state. Regardless of the parents’ earnings, students can apply for the so-called tuition fee loan. The exact framework conditions for the tuition fee loan vary slightly depending on the federal state.
Requirements and eligibility for loans
Who exactly is entitled to a loan is clearly outlined:
- German citizens, family members of German citizens
- EEA or EU citizens
- Educational residents who are enrolled at a German university (or a university in the respective federal state) and are therefore subject to tuition fees (except hardship cases).
The tuition fee loan is paid regardless of the subject studied and can be applied for for any first degree. Subsequent non-consecutive and consecutive master’s programs are also funded, but a further education master’s program is not funded.
The loan can be used once per semester – this means that only half of the semester fees are paid for a double degree at different universities.
The amount of the tuition fee loan always corresponds to the exact amount of the current semester fees that are incurred during the course. The maximum number of semesters is 10 or 14: after the 10 semesters, the tuition fee will be reimbursed if the student can provide proof from the university that certifies that the student has successfully completed his studies within these 4 months becomes. The applicant must not have reached the age of 41 in the year in which he last applied for the semester fee to be paid, or in the same year.
It is not possible to finance only part of the tuition fees via the tuition fee loan, the costs are always fully borne.
The approval of the loan is independent of your own assets, the assets of your parents, any security deposits or a credit check.
How do I apply for the loan?
The loan is applied for on the Moneypower Bank website, and the entire banking communication then takes place via this platform. The loan must be applied for at the university within the respective deadlines for re-registration or enrollment, but can be granted afterwards. In this case, the student must present the semester fee and will receive a repayment from the bank later, ie after approval.
You will need an identity card for the application, alternatively a passport, which must be supplemented by a current and valid registration confirmation, as well as an affidavitsigned by the applicant that the information provided is correct and true. Foreign students and minors have to provide additional documents, more information can be found on the Moneypower Bank website.The application may only be signed by the student if an employee of the respective university is present (authentication test).
The application for the tuition fee loan is checked by the university, which in turn forwards the application to the Moneypower bank. There is no closing fee due when the contract is concluded.
Interest and costs
The interest rate on the loan is variable and, as with “ordinary” loans, is based on the 6-month EURIBOR, plus a small administrative cost margin. When the loan agreement is concluded, a maximum interest is agreed between the bank and the borrower, which the current interest may not exceed, even if the market interest rates should exceed this interest rate over the years.
However, if the EURIBOR falls, the interest on the tuition fee loan will also decrease. Interest is adjusted to EURIBOR on April 1 and October 1, respectively. Interest accrued is deferred until the loan is repaid and does not have to be repaid during the term.
The payment on the loan is not to the borrower but directly to the respective university, the exact date of the payment depends on whether it is a first enrollment or for feedback.
The payment can be ended or interrupted by the student every semester, which means that the tuition fee credit does not have to be applied for every semester. Documents such as proof of performance or student certificates do not have to be sent to Moneypower-Bank again, as the bank receives the required data directly from the university.
The subject can be changed, this does not affect the loan payment. However, this does not extend the term.Should the students be retroactively exempted from tuition fees already paid shall be repaid directly from college to the bank, this also applies to exemption from tuition fees due to special achievements of students.The borrower still has to pay accrued interest.
Payment of the tuition fee loan can be terminated by notifying Moneypower via the Moneypower online portal. The contract term automatically ends when the student reaches the maximum age or the maximum payment period. The student must inform the bank when completing or ending their studies and changing their nationality.
When and how must the loan be repaid?
In principle, the debt and the interest are deferred during the course. Repayment begins only after the end of the course or the end of the term and a subsequent waiting period, ie a repayment-free period of 18 months. Interest continues to accrue during this waiting period, but no further payments are made.
In each loan phase, the borrower can repay the loan in part or in full or cancel it without incurring any costs. Termination can only take place on April 1st and October 1st, a one-month notice period must be observed.
The amount of the installments depends on the term and the amount of the debt. At the end of the waiting period, a repayment proposal is made by the bank, which provides for a repayment phase of 10 years. The borrower can shorten the term by higher rates, lower rates result in a longer term. The maximum duration of the repayment phase is 25 years, the monthly rate must be at least USD 20.