Student Emergency Loans During Covid19

Student Emergency Loans

Written by Germany Simplified

October 16, 2020

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Students in Germany are heavily dependent on their part time jobs to sustain. They attend university lectures for a few hours at the beginning of the day and then head to work to earn their bucks. This year, because of the deadly coronavirus pandemic, and the strict lockdowns imposed in Germany, every student’s income has been highly affected. The situation went so out of control that the Government had to step in to help.

Students used to manage their food and rent expenses by the income they got through their part time jobs. These part time jobs were very important to them since they could freely bare the costs of their basic necessities. Now that the places where the worked to earn their extra income got shut due to lockdowns, students were not prepared with excess money to spend. Their part time jobs were a part of their livelihood which suddenly vanished due to the covid19 pandemic.

German students and universities have filed warnings for the coronavirus pandemic since the unprecedented lockdowns have wiped off their income coming from the part time jobs. The pandemic has left students in Germany stranded due to a huge financial crisis. The students in Germany are being forced to pay their regular tuition and accommodation fee without being able to use the facilities which is just adding on to their troubles in these stressful times. All the other expenses are supposed to be paid just as olden times but the no job situation is new. This situation is causing students a lot of money crisis for which they have to run out for emergency loans from the Government.

Due to all the money shortage, students are opting for taking loans. Over the past few months, a lot of students have been taking student emergency loans from the government which mount up to approximately a billion euros since so many students are asking for it.

The financial hardships that the students are facing is a huge deal for the German Government. If financial aid is not given in time, students will have to abandon their academics which will eventually cause more problems in the country. Around two thirds of students work alongside their degree and for international students, the numbers are higher. While there are a few who do not work, but that does not mean they are not affected at all by this since it is going to affect scholarships too.

Students wrote letters and letters to the Government expressing their struggles in these distressed times. It was very important for the management to help them in some or the other way. Giving them rapid access to interim financial aid was a need of the hour.

The Federal Government and the coalition have now announced a well- balanced plan for student financial aid. This plan has been made keeping in mind the current scenario. This plan will help the German students in need and will also ease off financial burden in the future.

Student Emergency Loans?

To combat these times the Government first had to come up with a solid plan. It is not fair for the students to have a debt on their heads while they are undergoing such a financial crisis at their end. The lawmakers in Germany came up with a draft on the 22ndof April, 2020, stating that the government would allow students to earn money in a broader range of fields which have been affected by the pandemic without a reduction in their state aid.

This is a very smart move by the German Government. Not only will this give a boost to the other industries of the economy, but it will also heavily benefit the students. This has the potential of generating more money in the system so that the rotation of cash takes place smoothly and everybody’s pocket gets a hike.

Student Emergency Loans for International students

Since May, 2020 German banks are offering loans to the students without any interest on them until March, 2021. This reform has been undertaken to help the German students in the harsh pandemic times. The new thing that has taken place in Germany is that, this offer is also available for international students. This has happened in Germany for the first time ever that students from abroad will have access to loan free loans for a limited period of time.

In specific terms, students can apply for a maximum of 650 Euros a month. This can go on for 14 whole semesters which comes up to 54,600 Euros. The loan can be applied for online without taking the trouble of physically going to banks to get the loans approved. The Government says, this is a fair and quick means of giving students financial aid. The concerned students now have access to immediate financial help which is mounting up to 1 billion Euros.

The offer was initially presented by the Federal Education Minister, Anja Karliczek as“interest-free”. She was eventually forced to withdraw her statement since the loan is not technically interest free. The “interest-free” policy is only applicable for the pay-out phase. Post that, the students will be eligible to pay heavier interests than what are available in the market.

The financial aid offered by the Government to university students was eventually slammed by a number of politicians. The politicians said that, the loan is like any other loan. Students are liable to pay heavy interests on it irrespective. It is just being marketed as an interest-free loan to save their reputation. Politicians have taken their opportunity to let the public know the truth entirely and not get fooled by the Government. The loan is going to be helpful in terms of being interest free only until the pandemic ends. Once things start getting better, students will be under twice the amount of pressure in order to repay the loans paying a higher rate of interest. The politicians in Germany have taken charge of letting the public know the truth to the fullest and not fall under the gimmick created by the Government.

Conclusion

The coronavirus pandemic has been an unprecedented crisis all over the world and the authorities universally do not know how to deal with it. The German Government came up with a set of policies to help their citizens and interest-free student emergency loans appear to be one of them. This article contains all that you need to know about the same!

 Read here to know more about some interesting facts about German Lives.

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