German cabinet approves delayed BAföG reform with higher rates from 2027

Cabinet approves delayed BAföG reform

The German federal cabinet approved a BAföG reform bill on Wednesday, 12 August 2026, after months of coalition disputes over financing. The bill now moves to the Bundestag and Bundesrat, which are expected to debate and pass it in autumn. The reform raises financial aid for students and pupils but delays most increases by at least half a year compared to the original coalition agreement.

CDU/CSU and SPD had pledged in their coalition agreement to raise the housing cost allowance (Wohnkostenpauschale) for the upcoming winter semester 2026. Due to tight federal finances, the increase was pushed to the summer semester 2027. At one point the increase was entirely in question, with the SPD protesting, before a compromise was reached. The housing cost allowance will rise from 380 to 440 EUR per month for students no longer living with their parents.

Gradual increases through 2029

The BAföG basic need rate (Grundbedarf), unchanged at 475 EUR for two years, will rise in two steps: to 503 EUR in the winter semester 2027/28, and to 563 EUR in the summer semester 2029, matching the current Grundsicherung level. Together with the housing allowance, recipients would reach up to 1,003 EUR after the final step, compared to the current maximum of 855 EUR. Those who pay their own health insurance receive additional supplements, bringing the current maximum to 992 EUR; these supplements are also set to rise. From 2030, BAföG rates will be reviewed and adjusted by law every two years to bring more consistency to the system.

Schüler-BAföG for vocational school students not living at home will increase from 666 to 713 EUR starting next spring. BAföG is always calculated individually, based on income of parents, spouses or partners, and the applicant's own income and assets.

Digitalization and wider eligibility

Applications will move to the "BAföG digital" online portal, with limited exceptions. The Leistungsnachweis, a progress check previously required in the fifth semester to confirm students were on schedule, will be abolished. Income allowances (Freibeträge) used to calculate eligibility based on parents' and partners' earnings will rise automatically by 1.5% annually from 1 August 2028, intended to prevent recipients from losing eligibility as inflation and wages grow. Without the adjustment, BAföG recipients could lose their entitlement due to parental wage growth and inflation, according to the SPD. The total additional cost for federal, state, and local governments is estimated at roughly 1 billion EUR over the next four years.

Reactions split between welcome and criticism

Bundesforschungsministerin Dorothee Bär (CSU) defended the package as a step toward fulfilling BAföG's promise of upward mobility.

Mit dem Kabinettbeschluss sind wir einen entscheidenden Schritt gegangen, damit das Bafög sein Aufstiegsversprechen erfüllen kann.

Mecklenburg-Vorpommern's science minister Bettina Martin (SPD) welcomed the reform, stating that studying must not depend on parents' wallets. The Deutsches Studierendenwerk called the cabinet decision an important signal.

Mit dem heutigen Kabinettsbeschluss endet eine viel zu lange Phase der politischen Ungewissheit.

Anbuhl noted, however, that the increased housing allowance would still fall well below the national average WG rent of 512 EUR, and 800 EUR in Munich. He also said the full alignment of the BAföG basic need with the minimum social benefit by 2029 was taking too long. The GEW union called the reform "a delayed little reform with built-in social cuts" and urged the Bundestag not to pass it. Green research politician Ayse Asar accused Union and SPD of shortcomings.

Recipient numbers at 25-year low

In 2025, 570,000 people received BAföG, down 7% from the previous year and the lowest level in 25 years. Student recipients fell 8% to 443,100, while pupil recipients declined 1.6%. Germany has approximately 2.9 million enrolled students and 11.5 million pupils. Food prices have risen 30% since 2021 according to the Statistisches Bundesamt, adding to the cost pressure on students that prompted calls for the reform.