Demand for Student Loans Rises Again in Germany Amidst Bafög Reform Delays

The demand for student loans in Germany has seen a notable resurgence, marking the first increase since 2022. An analysis reveals that in 2025, approximately 15,200 new student loan contracts were concluded, representing a rise of over 17 percent compared to the preceding year.

Ulrich Müller, the author of the "Studienkredit-Test 2026" report, pointed to several factors contributing to this trend. A primary reason cited is the ongoing delay in the Bafög reform, Germany's federal student financial aid program. The uncertainty surrounding Bafög has compelled many students to seek alternative financing, leading them to bridge funding gaps with loans.

The report highlights a particularly strong performance by the federal government's education loan, administered by the Federal Office of Administration. New contracts for this loan surged by nearly 40 percent, reaching around 4,600. In contrast, the loan offered by the Kreditanstalt für Wiederaufbau (KfW) saw an eleven percent increase, with close to 8,000 new contracts. However, the CHE expert noted that the KfW loan remains less appealing due to its comparatively high interest rates and outdated terms.

Müller's analysis involved a comparison of 25 different offerings, including student loans, study financing, and educational funds. The findings suggest a growing reliance on credit among German students as they navigate their educational journeys, influenced by policy delays and the availability of different financing options.

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The outstanding Bafög reform, among other factors, led to an increase in demand for student loans.