How Does Germany Afford Free Tuition For All Of Its Citizens?

March 27th 2015

Last Year, Germany announced it was making its university system free. Given mounting college costs in America, ATTN: wanted to interview a higher education expert to learn whether any best practices could be applied domestically. We spoke with Mark Huelsman from the New York-based think tank Demos for answers. 


ATTN: Germany is making college free for all of its citizens. Is this really true?
Yes! More specifically, Germany – like the U.S. – is made up of states, and while most states had already done so, the lone holdout state (Lower Saxony) recently abolished tuition and fees for good.

ATTN: Ok - I don't get it. How can a country with 80+ million people entirely fund higher education and not go bankrupt? Where is the money coming from?
Even before this news, Germany had extremely low tuition and fees – around $600 per student. In other words, around $14,000 less than what students here have to pay. Germany, and many other European countries, view higher education as more of a public than a private benefit. They can afford this for a couple reasons. First, they simply agree to pay higher taxes. Second, Germany has a lower percentage of students go on to college than we have here in the U.S. Here, particularly at public schools, college costs have risen as a response to lower levels of public support from states, and increasing numbers of students going to school.

ATTN: Is the German government supportive of this or was it a contentious battle? What did opponents of this plan say?
In fact, German law only allowed for the collection of tuition and fees as recently as 2006. 30 years prior to that, there was an actual law on the books (in West Germany at the time) that more or less prohibited tuition and fees. In the 1990s, fees were introduced for students who had taken much longer to complete degrees, as a way to both speed up the process. In 2006, German states were given a considerable amount of freedom in determining how they would finance postsecondary education – but even then, several states (including Berlin) still refused to introduce tuition as a way of doing so.

ATTN: Have US elected officials weighed in? What are they saying? Is there any chance this will happen here in the USA?
Don’t hold your breath that we will have tuition-free education anytime in the U.S. soon. But that doesn’t mean that we couldn’t have a more affordable and equitable system. At the state level, Tennessee has introduced a program of “free” community college tuition, with Chicago and several other U.S. states following suit with proposals, though even that program is pretty limited in the benefit it provides students. At the federal level, policymakers have been primarily focused on how to reduce current debt, or help struggling borrowers with monthly payments by enrolling more borrowers in income-based repayment plans. Others have been focused on the inadequacy of grant aid in meeting the needs of students, but there has yet to be a push to fully abolish tuition and fees, or take much autonomy away from the states and institutions who make those decisions.

And obviously, our system differs from Germany in some fundamental ways – students at major U.S. public and private universities tend to have more flexibility, more student services, and a far more expansive array of campus activities. But it’s important to remember that a high-cost, debt-based system was not always the norm here. Just 20 years ago, fewer than half of graduates borrowed for college (compared to 7 in 10 graduates today). And just 30 years ago, you could finance a year’s worth of tuition at a minimum-wage summer job. But due to deep and unrelenting state budget cuts, inadequate grant aid, and poor targeting of some of the subsidies we do provide, that time seems as foreign as Germany’s system does today.

At Demos, we’ve created a proposal for a new federal matching grant program that would provide states with incentives to reinvest in higher education to levels that once made it affordable, and to target funds at the students who most need them. Our goal is to return the U.S. to a system of primarily debt-free higher education (meaning, essentially that you could pay for college with a summer and/or part-time job), particularly for low-income and middle-class students.

ATTN: Do any other countries have free higher education?
Yep, many countries have either free higher education, or extremely low tuition and grant aid that offsets it for most students. These include the usual suspects in Northern Europe (including Denmark, Finland, Iceland, Norway, and Sweden), and our friends to the south in Mexico and Brazil. That said, many countries have gone away from totally free higher education, and have instituted small student fees. But those fees, particularly across Europe, are often substantially smaller than those here at home, and their subsidies are targeted in a progressive way. Beyond “free” education, Australia and New Zealand have a system tuition and fees, backed with student loan repayment that is entirely based on what you earn after leaving school. Student borrowers who make less than $50,000 a year owe zero monthly payments, and never pay more than 8 percent of income. While we have a similar program here, it is less generous and not very well utilized.

ATTN: What can I do to encourage US elected officials to take similar action and make college affordable here at home?
At the federal level, we have a system of federal financial aid that could go a lot further in meeting the costs of college. The Pell Grant, our cornerstone piece of financial aid, used to cover nearly three-quarters of the cost of college. Now, as costs have risen and grant aid has stagnated, it covers one-third. Congress has an opportunity during the upcoming reauthorization of the Higher Education Act to return grant aid to a reasonable percentage of college costs, which would go a long way in helping stem the rising tide of student debt.

What we also need to remember is that tuition only makes up a small part of what it takes to go to college, particularly at community colleges. In fact, tuition makes up less than half of what it costs to go to school. The rise in student debt is partially a result of high tuition and fees, but it’s also because students need to live somewhere, transport themselves to and from school, eat, and buy required books and supplies. So when we talk about the totality of the burden that students face, it’s important that we provide students with all of the financial supports necessary that will make it more likely for them to complete their degree program, and do so with little, if any, student debt.

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