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Germany: New regulatory package for state education loans

The new package of reforms for the German Federal Education Assistance Act, known as “BAföG”, is in force since August 1, 2016, with the aim of improving the financial assistance for present and future beneficiaries. The amendment provides for an increase of the required rate and income allowance, rent subsidy and support for young parents as well as a reduction of the bureaucratic process. Students will be able to benefit from these improved conditions in the regulatory framework with the start of the new school year/Winter-semester.

According to the forecasts, not only will the funding amount rise but more students will actually be able to benefit from BAföG, leading to an estimated average increase yearly by 110.000, resulting in the highest number of beneficiaries in more than 3 decades.

Concretely the changes entail:
  • Required rates and income allowances increase by 7 percent
  • Rent subsidies (for students living outside the parental home) will be lifted to 250EUR - this group seeing their total benefits rise to 735 EUR (9.7 percent)
  • A fixed sum of 130EUR per child in subsidies is allocated, supporting young parents to better afford placing their children in temporary care, for a better management of family and studies.
  • Students are now allowed to take up a permanent “Minijob” with a maximum salary of 450EUR, without fearing reductions in financial aid. This is complimented by a rise in allowance for private capital of students to 7500.
  • Structural changes come in force for students in a transitional period between Bachelors and Masterscloseing a gap in support, the release of final study results now induces the graduate-status, rather than the moment when final exams are completed – extending financial aid up to two months.  
  • All BAföG applications can now be made online

Apart from this, third-country nationals with permit for residence or tolerated stay will now be able to apply for BAföG after just 15 months rather than 4 years, as before.

To better support BAföG beneficiaries and create more equitable education opportunities, the total reform package sees an additional yearly investment of EUR 825 Million.

Ministry of Education and Research – press release (only available in German)