How to pay for university

Heading to college is an exciting prospect. Yet many are asking themselves the same question: “How am I going to pay for it?”. While some can rely on their parents for financial support during university, it isn’t an option for others—and neither is working full-time while studying. 

That’s where student loans, grants, and scholarships come in. These funds can cover anything from tuition fees to living costs and learning materials, and the amount you receive varies depending on where you live. Public universities in Germany, for example, don’t charge tuition fees, so a student loan (or BAföG) of just €10,000 may be enough to finance your entire education. Compare that to the UK—where students can get up to £7,987 in loans per academic year. 

Whether you’re fresh out of school or heading back to school, this guide on how to pay for college in Europe is for you—courtesy of N26.

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Student loans, scholarships, and grants—you might have heard of them, but may not know what makes each one unique. If you aren’t relying on private funds to finance your studies, it’s a good idea to check out these funding options, who is eligible to receive them, and how to go about applying. If you need a more in-depth guide, be sure to also check out our Student Financial Support article here.

Scholarships—they’re nice to have, and look good on your CV, but getting one depends on lots of different factors. When looking at how to pay for college, a scholarship is a useful option for students with a strong academic, sports, or musical record—though they may also be awarded based on financial need, and personal/social circumstances.

Here’s what you need to know:

• A scholarship may cover part or all of your tuition or expenses, and—unlike a student loan—it doesn’t have to be repaid.
• Scholarship dispersals differ depending on the program. They may be paid out as a lump sum, or at regular intervals (e.g. per semester or annually).
• Your university or college website will likely have a list of available scholarships. Many private companies also offer them, whether to encourage diversity in the workforce or support young talent.
• Scholarship applications vary and can include anything from performing a piece of music to writing an essay or presenting a design portfolio—but it could also be as simple as attending an interview or filling in a form.
• Looking for the top scholarships in Europe? A full list is available here.

Fact: The German Academic Exchange Service (DAAD) provides financial assistance to over 100,000 German and international students each year, making it the largest funding organization of its kind in the world.

Grants are awarded by governments and institutions to help students pay for their college expenses. Unlike scholarships, they’re generally based on financial need. Grants are usually calculated according to your family’s income for the previous year, though if your situation has only changed recently, you might still be eligible for assistance.

Here’s what you need to know:

• You don’t have to pay a grant back. Like a scholarship, it may be paid through single or recurring transfers.
• A grant can have various alternative names—such as fellowship, studentship, sponsorship, and student allowance.
• Along with family income, a grant may be based on your nationality, personal circumstances, residential status, and chosen course of study.
• A list of grants available in Europe by country can be accessed here.

Fact: “Bourses-scolaires” is a French study grant amounting to €1,032 to €5,679 per year, depending on the level.

You may already have looked into student loans as you pondered how to pay for college. Here’s a breakdown on what they are and how much you should expect to pay back later on. 

Note: Italy and Spain don’t have centralized student loan systems, so many students don’t apply for them (private loans can be arranged with banks). The information below covers the UK maintenance/tuition fee loan system, the French Prêt étudiant system, and the German BAföG system.

Here’s what you need to know:

• A student loan is money that you borrow from the government to pay for your studies under the agreement that you will pay it back once you’ve graduated.
• The amount you’re allowed to borrow may depend on a variety of factors. 
• The UK has a two-tier loan system consisting of:
  • Maintenance loans: money borrowed to cover your living costs (rent, food, bills, etc.)
  • Tuition fee loans: money borrowed to cover your tuition fees
• The loan you take out may be subject to an interest rate that could add to the amount you’ll have to repay after you finish your studies. For 2021, these figures are:
  • UK: 2.6% for salaries up to £27,295 and 5.6% for salaries over £49,130
  • France: Between 0% and 1%—not contingent on earnings
  • Germany: 0% interest-free 
• In general, loan repayments are automatically deducted from your wages after you start working. The exception is if you are a freelancer or sole trader, in which case you have to set up a direct debit for your monthly repayments.
• In the UK and France, you can apply for a student loan before you’re accepted to a university. In Germany, you must wait to apply for your BAföG until you’ve been accepted to a program. If you don’t manage to apply in time, you can still submit your loan application during your first year of study.
• You decide what you do with the loan. Tuition, rent, food, books, subscriptions, leisure activities—you’re the one paying it back later on, so it’s up to you how you spend it. In fact, it may make sense to save some if there’s money left over to get a head start on your repayments. 
• In the UK, any remaining loan amount not repaid after 30 years is forgiven.

Fact: In the UK, more than £17 billion is loaned to around 1.3 million students per year. According to the UK government, the total outstanding loan amount is approximately £141 billion, and it’s expected to reach £560 billion by the middle of the century! 

Whether you’ve just left school or are in the middle of an exciting career, you need a bank that understands what you need, when you need it. So why not try N26? It’s 100% mobile, 100% secure, and 100% easy to use. From paperless communication to innovative features, our services are designed to minimize banking hassle and maximize control over your finances. What’s more, N26 has no hidden transaction fees and gives you a number of free withdrawals at ATMs in SEPA countries. Whatever stage of your academic or professional career you’re at, it’s always the right time to open an account with N26. Check out our account types and membership options here.