Young people know that in an uncertain job market, it will be harder for them to find a job. A major problem for those who have taken out a loan. To help them cope with this situation, banks promise flexibility, including a grace period for repayment.
300,000 student loans taken out each year
The economic crisis caused by the coronavirus pandemic has affected all sectors, businesses, employees and students alike. This summer, half of the students who usually work during this period had difficulty finding a job. In the hotel and catering industry, for example, companies are hiring one employee out of two, according to Thierry Grégoire, president of the seasonal branch of the Union des métiers et des industries de l'hôtellerie (UMIH), interviewed by Le Monde.
With no short-time working and no alternative solution, it's the students who have to bear the brunt. The hardest hit are those who have taken out a student loan that will be repaid once they have completed their studies, thanks to their first job. According to La Banque Postale, nearly 300,000 student loans are granted every year, for amounts ranging from 750 to 120,000 euros.
Banks ease student loans
Aware of the difficulties encountered by young people whose professional integration is made uncertain by the health crisis, several banks have set up exceptional assistance schemes.
Crédit Agricole, which claims to have 20% of its customers aged between 18 and 24, is offering 0% student loans of up to 5,000 euros from June 1 to September 30. Subscribers will have 4 years to repay them, with a 3-month grace period.
For its part, La Banque Postale offers loans at 0. 10% for amounts from 1,000 to 10,000 euros, repayable over terms ranging from 1 to 10 years. In addition, customers due to repay their loans from March 2020 benefit from an extra 6 months' grace. This latter measure has also been introduced by BNP Paribas.
For the banks, however, these incentives are not without an ulterior motive. In fact, it's a way of building loyalty among their young customers, who will one day be led to take out a mortgage or other savings products.
State-guaranteed loans for students
Among the exceptional assistance schemes offered by banks is the State Guaranteed Student Loan (PGE). This allows young people under 28 toborrow money to finance their studies, without having to provide the partner bank (Société Générale, Banques Populaires, Crédit Mutuel, CIC, Caisses d'Epargne) with a guarantee from a relative or proof of income. The amount of the loan depends on the bank and can be up to 15,000 euros.