Covering the costs of university tuition is often far from straightforward for young people, who are more likely to have little income of their own. In this article, we provide an overview of potential ways of financing your studies and also reveal a few tricks to help you save money during your time at university.
While public and church-affiliated universities in Germany have not charged tuition fees since 2014, that does not mean that studying is free. Quite the opposite, in fact. Students still have to cover general living costs for rent, food, transport and insurance, as well as administrative fees each semester and the cost of learning materials. In addition, private universities like Munich Business School still charge fees – although the more individual support, stronger practical relevance, and the ability to make a fast start to your career after graduation mean these fees are a thoroughly worthwhile investment in your qualification level and, ultimately, your future. In 2016, the German National Association for Student Affairs (DSW) calculated the average cost of ten semesters of study (i.e. for both bachelor’s and master’s degrees) at almost €48,000, which equates to around €800 per month – and that’s without tuition fees.
It would be understandable if these high costs put you off university. However, there is still plenty of support available to help you make your dreams of studying a reality! Let’s take a look at some options for financing your studies.
Financial support from parents
When it comes to financing a university course, most students’ first port of call is their parents. Prospective students often involve their parents in the process of choosing a university, so it’s only natural that parents would want to support their children if they can.
As part of parental maintenance obligations in Germany, parents are legally required to finance their children’s first course of education until they obtain a certificate or degree that qualifies them for a given profession. The level of these maintenance payments depends on the parents’ income and how many children they have. Guidelines are set out in the Düsseldorf Maintenance Table. If a student lives at home while at university (or during other education or training), parents are not required to pay this maintenance in cash and can instead provide a proportion in benefits in kind (i.e. board and lodging). If the student moves away from home, however, parents must provide their maintenance in cash.
In return, parents can apply for child benefit and enjoy tax relief when completing their tax returns. In Germany, parents can receive child benefit until their child turns 25, meaning that the state is actively involved in financing the students’ maintenance and other costs. Child benefit payments have varied depending on the number of children a person has. However, in an effort to counter the impact of inflation on families, the German government will increase monthly child benefit payments to €250 per child from January 1, 2023. Although child benefits are intended to support children, the payments land in the bank account of the parent who submitted an application. If you can demonstrate that you do not receive support from your parents, or that this support is too little or irregular, you can apply to “redirect” the child benefit issued for you (Kindergeld-Abzweigung) so that the funds are transferred directly to your account.
If you have your own assets as a student – including child benefit payments – this reduces your need for financial support and, as a result, the amount your parents are required to provide. Unlike child benefit payments, the entitlement to maintenance support does not cease when a student turns 25.
If your parents (or your partner) are unable to provide financial maintenance support during your studies due to low income, you can apply for support under the German Federal Education and Training Assistance Act (Bundesausbildungsförderungsgesetz – more commonly known by the abbreviation BAföG). BAföG consists of two equal parts: a government grant and an interest-free loan, meaning that you will only ever have to pay back half of the BAföG you receive, up to a maximum of €10,010.
You should direct your BAföG application to the relevant BAföG office for your university or to the Studierendenwerk. For your application to be approved, you must meet certain criteria:
- Residency status: You most hold German citizenship or a right of permanent residence, a permanent EU residence permit or a settlement permit (see here for more details).
- Financial need: You must disclose your income and assets as well as your parents’ income (and your partner’s, if you have one) as part of your BAföG application. Thankfully, parental income allowances have been increased significantly for the 2022/23 Winter semester – see here for full details.
- Age: The age limit for BAföG was increased to 45 in 2022, meaning that you must be no older than 44 at the start of your studies to be eligible for BAföG. Certain exceptions apply, such as for students with children.
- First-degree studies: You can apply for funding for your first full-time degree-level studies. This includes bachelor’s and master’s courses, provided the latter follow on from the former. This regulation also covers studies following the ‘second-chance’ educational pathway. However, additional, supplementary and second-degree studies are not usually covered. You can still receive funding if you change subject, provided that you do so within the first three semesters of your studies and have a compelling reason for doing so.
- Proof of academic achievement: The BAföG office will require you to provide proof of academic achievement by your fourth semester of study (at the latest) to demonstrate that you are on track to graduate from your program.
The exact amount of BAföG funding granted depends to a considerable extent on the student’s financial needs, i.e. based on their parents’ income and the income and assets of the student applying for support. There are no cast-iron limits for parental income, so you should feel quietly confident and submit an application. You certainly shouldn’t decide against applying because you think your application will be declined. There are more people who decide not to submit an application despite being eligible than have their application declined because they are ineligible. As of October 2022, the maximum BAföG rate for students living away from home was €815 per month for students under 25, €934 per month for students aged 25 to 29, and €1,018 per month for students aged 30 and over. The maximum duration of BAföG support depends on the normal period of study for your chosen program.
Did you know? 1. You can also apply for BAföG support for a semester abroad. Funding is available through a specific international BAföG system. 2. BAföG is also available independent of parental income. It does not take your parents’ income or your partner’s income into consideration when determining your funding. You can apply for this funding if you worked for a minimum of five years after the age of 18, or if you worked for three years after spending a minimum of three years in self-financed training or education.
Financing your studies with a part-time job
Around two-thirds of students work alongside their studies. Part-time jobs offer a whole host of benefits, from enabling you to gain practical experience to improving your self-confidence and independence – as well as helping to finance your studies, of course. The working student (Werkstudent*in) model is particularly attractive because it offers certain social insurance benefits and often enables you to apply knowledge gained in your studies. You can find everything you need to know about the working student model here. However, whether you earn some extra cash in a mini-job, as a working student or as a student assistant, it’s crucial to remember one thing: don’t work too much! This can have a negative impact on your BAföG funding, social insurance contributions, the amount of tax you pay and the length of your studies.
Student loans and education funds
Student loans and education funds are other ways to finance your studies. Students often combine them with other forms of financing and only use them for a specific phase of their studies, such as the final phase when they have less time to work part-time.
Unlike other types of loan, student loans are issued in the form of monthly payments, which is more suitable for students’ needs. At the same time, unlike BAföG payments, students loans are ‘real’ loans – meaning that you will have to pay back the full loan amount plus interest at the end of your studies. As a result, there is a risk of becoming excessively indebted. To avoid this, you should closely research and consider the different student loan providers on the market, their application requirements and the terms and conditions they offer, especially the interest rate, product fees, waiting periods and the repayment term.
The most well-known student loan is the KfW Student Loan provided by KfW. This loan offers a reduced rate of interest and is granted regardless of your income and your parents’ income. Students aged between 18 and 44 who are studying at a public or state-recognized tertiary institution in Germany and are enrolled on a bachelor’s or master’s degree program or additional, supplementary, doctoral or other postgraduate study program are eligible to apply. The monthly payment is up to €650 over a period of up to 10 semesters.
Another service offered by KfW and the Federal Office of Administration (BVA) is the public Education Loan. It is aimed at students who have reached an advantaged stage of their studies. As a student, this means that you must have at least passed your intermediate (mid-term) exams, reached an equivalent achievement, or have enrolled on a postgraduate course of study. You must also be under 35 years old. The Education Loan provides financial support in the order of €100, €200 or €300 per month for a maximum term of 24 months.
There are also a number of private providers of student loans. However, the CHE Student Loan Test 2022 showed that students are increasingly reluctant to take out these loans due to inflation and rising interest rates.
Education funds offer one particular benefit for students over student loans, namely the fact that repayments are based on income in later life. This would appear to present a lower risk of excessive indebtedness. Depending on your salary after graduation, you may end up having to pay back less, the same amount or, for top-earners, even more than the funding amount your received (and therefore also more than you would have for a student loan). This financing method does therefore entail a certain degree of risk. Education funds often speak about a “reverse inter-generational contract” to highlight the idea of a community of solidarity. The CHE Student Loan Test has issued a positive rating for the financing offered by Brain Capital and Chancen eG.
Exclusive opportunity for MBS students: MBS Education Fund by Brain Capital Since 2023, Munich Business School has been an official partner university of the Brain Capital education fund. The MBS Education Fund enables students from the EU, Switzerland, Great Britain, Canada and the USA to realize their dream of studying at MBS - without any financial burden. After a quick and easy application process, Brain Capital takes over your tuition fees or an individually determined funding amount. After you have started your career and reached a minimum income, you pay a fixed percentage of your income back to Brain Capital as downstream tuition fees for a maximum of 10 years. A particularly attractive feature is that the repayment amount is capped at twice your funding amount. The repayments enable future generations to study at their desired university.
Financing your studies through scholarships
Think scholarships are reserved for the absolute academic elite? Think again! Of course, there are conventional scholarship programs for elite students – but even then, academic excellence is rarely the sole determining criterion. Social engagement and personality are at least as important. Among the 3,000 scholarships offered by public and private sponsors in Germany, there are a number that focus on different areas and aspects, including supporting students in certain subjects or from specific ethnic backgrounds. The my.stipendium.de platform (registration required) provides a clear overview of the scholarships open to you. You certainly shouldn’t neglect the possibility of a scholarship because, unlike BAföG funding and student loans, scholarship funding is usually granted. This means you will never have to pay back a cent and, in many cases, will also receive further support in the form of new contacts for your (future professional) network and something positive to put on your résumé.
In addition to charitable foundations, universities usually offer their own scholarship programs to enable talented prospective students who show genuine commitment to access university-level study regardless of their financial situation. These are usually partial scholarships and do not cover all fees and costs. If you decide to study at Munich Business School, you can apply for the following scholarships:
|Scholarships for bachelor’s programs||Scholarships for master’s programs||Scholarships for MBA programs|
|MBS Explorer Scholarship: 10–50% grant towards fees in the first and second semesters||MBS Explorer Scholarship: 20–40% grant towards fees in the first and second semesters||MBA Global Thinker Scholarship: Grant of up to €4,000 towards overall tuition fees, awarded to students who display an exceptionally globally minded approach|
|MBS BEST Scholarship: 10–50% grant towards fees in the first and second semesters for particularly high-performing students||MBS BEST Scholarship: 20–40% grant towards fees in the first and second semesters for particularly high-performing students||MBA Responsible Leader Scholarship: Grant of up to €4,000 towards overall tuition fees, awarded to students who display an exceptionally responsible approach|
|MBS Bavarian Scholarship: 10–50% grant towards fees in the first and second semesters, awarded to students on the International Business bachelor’s program, Bilingual track||MBA Smart Entrepreneur Scholarship: Grant of up to €4,000 towards overall tuition fees, awarded to students who demonstrate entrepreneurial flair and an enthusiasm for innovation|
You can find more information about the funding opportunities available at Munich Business School here.
Taking the time to put together a convincing and impressive application is decisive in securing a scholarship. You must also demonstrate your personal motivation and win through in the application process.
Tips & tricks to help you save while you study
Finding a suitable financing model for your studies is a vital first step. However, you will still have to be careful with your money during your time at university. It would be ideal if you could avoid spending all of the money you receive or earn, such as through part-time work, on financing your studies. If you can put a little money aside, this can make you less dependent on others once you graduate and help you to build your own investments.
Here are a few simple tips to help you save money during your studies:
- Consider exactly what you actually need.
Try not to be sucked into every passing trend; instead, consider each purchase carefully, thinking about whether it is genuinely useful and will provide value in the future. There’s no sense in paying for things you’ll only use for a few weeks or months before discarding.
- Find a room in a shared apartment.
Living with other students in a shared apartment will help you to share living costs with others. Plus, you’ll get to meet new people!
You can find everything you need to know about finding a student apartment here.
- Cook at home instead of eating out.
Buying prepared food every day will save you time – but definitely not money. Instead, draw up a meal plan to help you buy the food you need. This way, you can make sure you eat everything you buy and avoiding throwing food away. Your university might also have a cafeteria with meals at reduced prices for students.
- Watch out for special offers and discounts when shopping.
Of course, you won’t be able to avoid buying food entirely. Keep an eye out for special offers that can help you save your precious cash. The same also applies for subscriptions and memberships. Many universities have secured special offers for their students. For example, as a student at Munich Business School, you’ll benefit from discounted gym membership.
- Try to avoid printing documents where possible.
University studies often involve an awful lot of literature, documents and paperwork, including the lecture notes and books you’ll need to learn and progress. However, you should ask yourself whether you actually need these in paper form. Would a digital version be enough?