Student loans suffer from lack of interest

Cheap student loans with an interest rate of 0.875% throughout the year students are less and less popular. In the 2016/2017 academic year, only 4,444 such loans were granted, while a few years ago there were several dozen thousand of them.

Financing conditions under a student loan

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In the last academic year, the maximum income per person in a family entitling to grant a student loan is USD 2,500. All student years of study, including doctoral students, are eligible to apply for a student loan. All you need to do with your loan application is to submit your income statement.

Banks participating in the student loan program pay a maximum of USD 1,000 a month for the entire duration of their studies.

A student loan is a specific form of credit because it is paid out in monthly installments throughout the entire academic year, and should be started only after 2 years from leaving education in higher education – in preferentially low installments. Its interest rate is half the rediscount rate for bills of exchange – currently 0.875%.

Diminishing interest in student loans

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Since the beginning of the program of preferential student loans, they have already been granted 394,000. In recent years, however, there has been a decreasing interest in such financial support from the state for students.

As early as in the 2010/2011 academic year, 22 880 student loans were granted and not 24 246 students applied for. In subsequent years, there were fewer and fewer applications.

In the 2016/2017 academic year, according to data from the Ministry of Science and Higher Education, 4444 student loans were granted, and 4456 people did not apply. A year earlier, only 0.38% of students in Poland benefit from a low-interest student loan.

Students decide to take out a student loan

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So it turns out that today less than 1 percent. students decide to take out a student loan, and this is despite the decrease in student demand and the increase in the maximum income entitling them to grant a student loan. The decline in interest in student financing may be due to the demographic decline.

Another factor determining the low level of interest in student loans is that 41% of all Polish students live with their parents while studying, therefore they do not need as much money to support their studies.