The course is done. Thanks to BAföG, you didn’t have to worry about financing your livelihood during this time. However, only half of the money is free. 

The other 50 percent is an interest-free loan that needs to be repaid. The most important thing about BAföG repayment:

When do I have to repay the BAföG?

Thanks to the Vocational Training Promotion Act (BAföG), many students receive financial support from the state, which they later have to repay half of the amount.

However, the Federal Office of Administration does not push for BAföG repayment immediately after the end of your studies. It usually waits around four and a half years before it sends former BAföG recipients what is known as a notification of assessment and repayment. The repayment then begins about five years after the end of the maximum funding period. A period in which the ex-students can gain a professional foothold and ideally receive a good salary.

The repayment schedule for your BAföG repayment will be detailed in the letter you received from the office. The repayment is usually made in installments and takes up to 20 years. With sufficient income, the amount is at least 105 euros per month, with payment being made quarterly (a total of 315 euros every three months).

Paying back BAföG all at once brings generous discounts

There is also the option to repay the BAföG all at once. In addition to the advantage that you are rid of your debts overnight, the state usually also rewards you with generous discounts. You can save up to 50 percent of the loan amount in this way.

You will find a specific offer on how much the discount will be if you repay the BAföG in one go in the repayment plan of the assessment and repayment notice. The amount of the discount granted depends on the amount of the redemption amount.

Sometimes, due to the large savings, it is even worthwhile to take out a loan to repay the entire amount at once. Because the BAföG discount granted is in any case higher than the average market costs for a loan, given the current low interest rates.

Anyone who would like to pay a larger partial amount should also inform the office of this and ask for a corresponding notification. In this case, the office also grants percentage discounts.

BAföG repayment: exemption for low wage earners

For people with little or no income, an exemption from BAföG repayment is possible as follows:

• The creditable monthly income for single persons remains below 1,145 euros net
• The tax exemption increases by 570 euros if you are married and your partner does not earn any income and has not completed any qualifying training
• In addition, the amount increases by 520 euros if you have children who are not yet earning any money
• Further increases in the tax exemption are possible on special request, for example for people with disabilities and single parents

You must apply for the exemption from the Federal Office of Administration. If the application for exemption is granted, the repayment usually begins one year later, or lower installments are agreed. You can also apply retrospectively, but only for a maximum of four months. A maximum of ten years can be exempted from repayment. 

Deferment is possible in the event of considerable hardship

For special cases of hardship, the legislature has also provided for the option of deferring BAföG repayment – if an exemption cannot be given, but there is considerable hardship.

Considerable hardship means that someone is in financial difficulties due to unfavorable personal economic circumstances or would get into such difficulties if the amounts due were collected. A deferral is a discretionary decision to which BAföG repayers are not entitled. In addition, interest will be charged for the period of the deferral.

Do I always have to pay back BAföG?

Only the so-called “student BAföG” (not an official term) is a full grant for which there is no obligation to repay. Whether student BAföG is paid depends on many factors, including the living situation, the type of school or the degree. Student BAföG is usually awarded if you attend a vocational school that provides at least two years of training with a professional qualification.

In contrast, the “normal” BAföG loan must be repaid in any case. BAföG repayment is also due if you drop out of your studies. A complete waiver of the BAföG repayment is not provided for in the social legislation. Even in the event of death, the state has the right to collect the money, for example through the inheritance.

Is the BAföG repayment tax deductible?

Former BAföG recipients may be wondering whether they can claim the repayment in any form for tax purposes. Since BAföG is an interest-free loan, the answer is unfortunately: No.