The KfW student loan – an emergency scheme for students in the coronavirus crisis

12. May 2020

A new source of emergency funding is an appealing option for German students. The loan has a zero interest rate until 31.3.2021 as a result of the coronavirus crisis and can be applied for now.

The current pandemic is causing hardships for both businesses and employees. Student employees have been particularly affected because a lot of young people finance their studies either partly or entirely with a part-time job. Without the income from that part-time job, the money situation for many students has become critical and some are even considering dropping out of university.

The KfW bank is working with the Federal Ministry for Education and Research (BMBF) to offer fast financial assistance to these students in the form of interest-free loans. The scheme, which was launched on 8 May 2020, offers students the opportunity to receive up to EUR 650 per month.

Who is eligible to receive an interest-free KfW student loan?

The loans are available to all students at state-approved universities between the ages of 18 and 44. Post-graduate students and students on a second degree programme are also eligible to apply, although maximum semester limits do apply in some cases. Unlike the BAföG student loans, the parent’s income is not a criterion in the decision to grant a KfW student loan. As a result non-BAföG recipients can also apply for a KfW loan, the entire process is much less bureaucratic and no collateral has to be provided.

The scheme is initially intended for German citizens with their main residence in Germany. Students with other nationalities who meet the other requirements can apply for the student loan after 1 June 2020. In that case the first payment will be made on 1 July 2020.

What are the terms and conditions of the loan?

The amount granted to eligible applicants can be as much as EUR 650 per month, although lower amounts can also be applied for. No interest is payable on the amount received until 31 March 2021. The interest that would normally apply (effective interest rate currently 4.36% p.a.) will be paid by the Federal Ministry for Education and Research until 31 March 2021. These concessions will also automatically apply to KfW student loans which have already been granted. All payments during the relevant period will be interest free without the student having to make a new application.

When can students apply for the interest-free KfW loan?

There is an online application form on the KfW website for the interest-free student loan. Applicants have to fill it in and submit it with ID documents and an enrolment receipt. The payments are then made by a distribution partner, which can be the borrower’s bank or perhaps the ‘Studierendenwerk’ student service providers. Further relief has been offered to students in the Covid-19 pandemic in the form of longer submission deadlines for documents such as enrolment receipts to prevent payments being stopped in the event of lengthy university administrative processes.

To sum up, the interest-free KfW student loan is a practical and relatively uncomplicated option to help students make ends meet during the coronavirus crisis.

Your contact persons:
Marcus Nothhelfer, Partner
+49 173 7291 420


If you have any questions, please write to us.