Credit for further education
A short guide on continuing education loans – Everything worth knowing on the financing of vocational training of workers
Introduction to the topic of continuing professional education
Many of the employees in the Federal Republic of Germany would like to undergo further vocational training in order to have better prospects for a career jump or simply better earning potential. However, for some it is not so easy to complete a training course, not because of the lack of time and will, but because of the financing of further education, as these usually cost money. Even short courses cost several hundred euros, which are often borne entirely by the employee.
The following text is intended to give the reader an interesting overview of continuing education credits in order to inform them about the topic and to show that continuing education is also possible if there is a lack of financial resources. First, however, should be defined exactly what are loans for further education.
What is a continuing education loan?
Such a loan has the purpose and purpose of promoting the professional development of workers who, in their current situation, do not have the necessary financial means to afford further education. This is always necessary if the employer does not want to participate in the expenses that cost further education.
It is also worth noting that although there is some government support in the form of grants, in many cases they do not cover all costs. In summary, continuing education credits serve those who have the will but not the money for continuing education and training.
Combination with other financing options
In principle, every employee and employer can apply for a further training loan. Of course, the bank will check if the person is creditworthy. This should normally be the case, or if there is no high level of indebtedness of the person, since it is ultimately a person who pursues a regular professional activity and thus has a regular, monthly income. In addition to checking the creditworthiness of the applicant for the further education loan, it is still required that proof of the planned further education be provided. This can happen, for example, via the official registration or enrollment in a further education course.
The majority of banks granting a continuing education loan to their clients require that the client, after successful completion of the respective course, submit a certificate for continuing professional development which confirms in writing his presence and successful completion. Basically, such a certificate is issued by all further education institutions for all course participants. Banks require proof, as continuing education credits are usually granted at much more attractive terms than normal loans.
However, if the loan is used for other purposes, if the bank has not provided proof of completion, it will have an unpleasant effect on the borrower. The latter is obliged to use the continuing education loan only for the purpose of continuing education. However, it is worth noting that the costs of transport, ie fuel costs or the cost of mobilizing by public transport, are also included here.
Further tips worth knowing
Before embarking on a continuing education loan, it is important to inquire as to whether there are any other ways of funding continuing education and training that can be used. In order to do so, the employee should ask his employer where he expresses his interest in continuing education, also with the aim of providing even better support to companies through the new skills learned in advanced training or through the extended state of knowledge.
In other words, it is important to point out to the employer that investing in training is well worthwhile and rewarding. Many employers are aware of this and bear the costs of training employees.
Public subsidies
There is also the possibility of benefiting from public subsidies designed to help employees finance their training. Every worker and self-employed person who works 15 hours per week and does not have the financial means to finance further training with a further training loan can be reimbursed by the German government for up to 50% of the costs of the training.
This is possible within the framework of the so-called education premium, which is intended to reward the knowledge-hungry workers and the self-employed or to provide a further incentive for continuing education. The remaining 50% can then be paid by the employee or the self-employed through a training loan from his home or another bank.
For workers who are looking for a suitable solution for financing training or further education, a look at the current offers of the countries can certainly be worthwhile. As a rule, attractive programs for the promotion of employees and the self-employed, who are striving for further vocational training but do not have the necessary financial means, appear at irregular intervals.
It is also possible to supplement such a support program with a credit for further education in order to pay a part out of one’s own pocket. Further below is listed, which brings great advantage a participation in the financing of the education and training.
Scholarship for further education
Another interesting option for employees to finance continuing vocational training is a continuing education scholarship. This is interesting for all workers who are able to pay 10% of the cost of the training course themselves. Here again can be used in addition to the loans for training banks or credit institutions.
Deduct costs for tax purposes
It is particularly interesting that employees who themselves contribute financially to the cost of continuing vocational training as part of the financing of their further education can apply for tax deductions from the tax office. The only requirement is that the employee has completed a first vocational training.
Again, a development loan is interesting, because even this, that is, the interest on the loan and the loan fees, can be claimed for tax purposes. The same applies to all individual costs of the training. Here, the costs for the journey, the accommodation, for teaching aids (literature, use of the Internet, copies, etc.) and the food during the stay at the training center are also deducted from the tax.
Obtaining a tax return and filing with the tax office is, of course, a prerequisite for tax deduction in order to benefit from it.