Higher Education in the United States and Germany

In 2014, Lower Saxony became the last German state to completely waive tuition fees for all students at the undergraduate and graduate levels. This move comes at a time when student debt in the United States has exceeded credit card debt, totaling $1.3 trillion, and as students and their parents shell out thousands of dollars each year for a university education. German and American approaches to providing post-secondary education are clearly different. Is there any hope for a change on the part of the United States?

Yes and no. In January at Pelissippi State Community College in Tennessee, President Obama launched a plan to make two years of college tuition free to every American. This plan is based off of an initiative entitled “Tennessee Promise,” which accomplishes this feat by covering costs through state lottery funds and some federal aid. Since Tennessee is under the control of a solidly Republican legislature and governor, Mr. Obama sought to cast this move as a bipartisan effort and appeal by emulating the state’s plan. Predictably, this has not been so successful. The proposal, reported to cost around $60 billion, remains but an idea­ on the federal level.

Still, the fact that states like Tennessee recognize the importance of directing funds into developing human capital shows promise at a time in which post-secondary education has come to resemble a for-profit industry—desired by many but unattainable by most.

This is where the German model comes in. According to a recent article by the BBC, the number of U.S. students enrolled in higher education in Germany has increased by 20 percent in the last three years, currently standing at 4,600. Clearly, something is attracting them. When the costs of education—even at an in-state or public institution—are so high, many students need to pursue another option. With over 1,100 courses in English available at the undergraduate and graduate levels, Germany is becoming an attractive choice.

One student in the aforementioned article receives between $6,000-$7,000 a year from his mother, which covers all fees, transportation, food, and living costs. Students often pay at least this much per semester to attend public universities, so the rapid increase in foreign enrollment in Germany should not be surprising.

What appears to be surprising, however, is that the German taxpayer will bear the cost of all of these students. What incentivizes the Germans to subsidize education this heavily—particularly for international students?

The answer, naturally, is multi-faceted. One facet deals with demographic reality. Germany’s population growth is negative, meaning that the base for labor and taxes is slowly shrinking as more Germans retire from the workforce and begin placing an even larger burden on Germany’s generous social welfare state. The rate of retention (the percentage of foreign students that stay in Germany after completing their education) is around 50 percent, according to Sebastian Fohrbeck, an official at the German Academic Exchange Service (DAAD). Fohrbeck continues, “Even if people don’t pay tuition fees, if only 40 percent stay for five years and pay taxes we recover the cost for the tuition and for the study places so that works out well.”

The Brookings Institution states that the United States has at least 500,000 international students studying on an F-1 visa, and that about 45 percent of these extend their visas in order to work in the U.S. Clearly, this has a massive impact on the U.S. economy, as these highly-qualified immigrants contribute substantially to the tax base and the quality of the American workforce. However, is it possible that ever-increasing tuition rates, coupled with the attractive offer of subsidized education in other nations such as Germany, will continue to attract young Americans abroad? Though the balance of American students studying in foreign countries is currently outweighed by foreign students pursuing a degree in the U.S., the reasons that attract Americans abroad are still obviously present and are ideologically-bound.

In some sense, it appears that the German approach to education is more societally or holistically-minded than that of the United States. The German system has long been lauded for training apprentices in all trades, which has given rise to a system that fills all needs of society. A recent AGI video interview with Robert Lerman, Institute Fellow at the Urban Institute and professor of Economics at American University, details workforce education in both countries and the importance of vocational training as a viable option for students.

Germans see that education has massive positive repercussions on a societal level, often including swaths of society that are left out in countries like the U.S. due to socio-economic forces and the lack of opportunity or accessibility. At a time when income inequality continues to increase and society continues to stratify into the “have and have-nots,” particularly in the realm of education, adaptation of an inclusive model makes sense. Systems that isolate and empower the economic elite and preclude those at the bottom from having any realistic chance at bettering themselves or enhancing their position are not only unfair—they stand in direct opposition to the American dream.  Society needs the voices and knowledge of every member, for isn’t inclusion of diversity what democracy is all about?

Americans should take a hard look at the higher education system in place and consider alternatives. Though the German system is by no means perfect—or perhaps even indefinitely tenable—it presents a stark idealistic contrast and attractive substitute to pursuing one’s higher education in the United States.

The views expressed are those of the author(s) alone. They do not necessarily reflect the views of the American-German Institute.