Student loan
“We want to enable stress-free studying”
In a Berlin backyard, a new start-up is using an online platform to improve the financial prospects of students in Germany. A cooperation with KfW, the first of its kind, is making it much easier to get a student loan.
The new way to apply for student finance takes just 18 minutes. You can complete the four-step process from home in just a few clicks: first, determine the amount of finance required, then choose from the range of financing options, calculate how much you are entitled to and, finally, fill out the application details. “By the end,” says Bastian Krautwald (top picture), “you have a KfW Student Loan application that is straightforward to submit.” If applicants have all of their key documents to hand, such as their ID card, bank card and certificate of study, ready to be uploaded to the application portal created by his start-up deineStudienfinanzierung, the whole process actually takes less than 20 minutes, he assures me. Although this isn’t the first time that founder Krautwald has explained the process on the screen, he can barely hide his enthusiasm. He has the air of a very proud father discussing his child.
“No one in Germany needs to abandon their studies due to lack of funds.”
Founder Krautwald is driven by the idea of enabling anyone who wants to study in Germany to do so - with platform-based financial advice.
A platform pools the different funding possibilities
The pride is justified. After all, 18 minutes is almost unimaginable compared to the time the process took before. In 2016, Bastian Krautwald got first-hand experience of the bureaucratic challenges faced by thousands of students each year. Completing his combined vocational training and degree programme at Berliner Volksbank, he gained some insight into retail banking, and thus also into the complex application process that confronts young people who want third-party financing for their studies. He noticed that it could take weeks to obtain a KfW Student Loan or apply for other financing and that this was leading some people to throw in the towel prematurely. “That is the case even though no one in Germany needs to abandon their studies due to lack of funds,” says Krautwald. “There are enough financing options. We aim to enable people to study without financial stress.” The statistics support Krautwald’s argument: needs-assessment data for all university cities in Germany suggests that students here require an average of 1,000 euros per month. In order to come by this money, a Unicum study showed that around 80 per cent rely on part-time jobs. Parental funds suffice in only 20 per cent of cases. Time and again, financial constraints are cited as a reason for having to discontinue studies. So, what if it were possible to not only bundle the complex financing options on one online platform, but also to help students find the right product and guide them through the entire application process in a very short space of time?
Read more under the image gallery.
The start-up deine Studienfinanzierung has had enough causes for celebration. It is writing on its success story.
KfW as a key partner
Alongside his own studies, Krautwald and two business partners started bringing their idea to life. They completed a start-up promotional programme by Axel Springer, then asked 150 students about their experience of student finance. This confirmed what they already suspected: the students found many aspects too complicated and time-consuming. The market analysis was followed by three years of programming, punctuated by a winning appearance on Germany’s Dragons’ Den-equivalent “Die Höhle der Löwen”. With wind beneath the company’s wings, various business angels provided the necessary funds in two rounds of finan-cing, and the platform went online in 2018. The number of customers wanting to arrange an average amount of 750 euros of third-party financing per month through deineStudienfinanzierung grew to nearly 100,000, and today Krautwald’s start-up is approaching its ultimate break-through with another innovation. Their key partner in this process? KfW.
The Eisenhower method helps prioritise decisions.
“We’ve managed to take a significant step forward for Germany,” says Bastian Krautwald. “For the first time, an early-stage start-up is being allowed to offer and sell a KfW product under its own brand.” In practice, that means that digital interfaces are providing a direct connection between the deineStudienfinanzierung platform and KfW. Previously, the 20-page student loan application form had to be printed out and taken to the applicant’s regular bank, where it would be reviewed and posted to KfW, who would in turn review it and issue an approval or rejection. Now that the whole process is organised using algorithms, it runs faster and is more streamlined – right through to the automated approval. The start-up was accompanied through this one-off cooperation by KfW product manager Sandra Langewisch. “At the start, we asked ourselves what role we, as KfW, wanted to play. Do we want to run our own platform, or offer a product?” she says. Their conclusion: “We are great at developing promotional products. Others are better at setting up platforms.” Bastian Krautwald has counted. KfW and the team at deineStudienfinanzierung met 40 times in two-and-a-half years. In early November, a six-month testing phase began with a handful of students and three sales partners. The analogue application route continues to run in parallel.
Eventually, Bastian Krautwald is certain, there will be far greater demand for KfW Student Loans. More than 320,000 students received a KfW Student Loan between 2006, the start of the promotional programme, and 2019. The numbers have been growing recently due to the coronavirus pandemic. The funding volume for this period exceeds 6.8 billion euros, with 500 euros per month being provided to students on average. From a sales perspective, these are good figures. However, for Sandra Langewisch, improving the numbers further still would only be a nice side effect. “For us, first and foremost, it was about designing the process within KfW to be more efficient, not about boosting sales. Although, of course, people should consider using a KfW loan before they decide not to study.” Bastian Krautwald can only agree. In his view, his mission is nowhere near complete. There are three million students in Germany, he emphasises, of whom 80 per cent require external funding. This number motivates him to make his platform even more effectively.
Published on KfW Stories: 1 December 2020.
The described project contributes to the following United Nationsʼ Sustainable Development Goals
Goal 4: Quality education
Refusing people access to education means depriving them of a basic human right – and of important development prospects for individuals and society. Education enables people to improve their political, social, cultural, and economic situations. Worldwide, 58 million children and 63 million young people still do not have access to primary and secondary schools. 90 per cent of all children with a disability never go to school. 781 million people are illiterate. 7.5 million people with functional illiteracy live in Germany alone.
All United Nations member states adopted the 2030 Agenda in 2015. At its heart is a list of 17 goals for sustainable development, known as the Sustainable Development Goals (SDGs). Our world should become a place where people are able to live in peace with each other in ways that are ecologically compatible, socially just, and economically effective.
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