How Germany Made Higher Education Free

How Germany Made Higher Education Free

Costs of the Ivory Tower Internationally

Countries with the Highest Annual Average Tuition Fees for Public Universities according to latest OECD data from 2011

Ireland $6450
Chile $5885
U.S. $5402
Korea $5395
Japan $5019

Countries with the Lowest Annual Average Tuition Fees for Public Universities according to latest OECD data from 2011

Denmark $0 (#comment: Bracket all to clarify that $0 = No Tuition Fees)
Finland $0
Mexico $0
Norway $0
Switzerland $0
Germany (as of 2015) $0

In 2015, the last state within German borders not to have abolished tuition fees followed suit with its 15 Länder, and Germany joined the list of countries with the lowest annual average tuition fee of $0.

Cultivating the fourth largest GDP in the world, Germany spends only 25% on higher education and renders tuition free. By comparison, the U.S. spends 47% of its GDP (the highest worldwide) on higher education, and yet its average annual tuition fees are the third highest internationally, while it also shoulders the weight of $1.2 trillion student loan debt.  (There are some US colleges that are tuition free.)

So how did Germany do it?

The short answer: By abolishing tuition fees gradually and instituting a Dual Education model.

Phasing Out Fees: From Third Reich to Third Lowest Unemployment Rate During the Great Recession

The Gradual Abolition of Tuition Fees

1949 The German Model, founded on a commitment to state-funded, universal, and public education, rose from the ashes of WWII.
(120-150 German Marks per semester)

1971 Germany’s Social Democrats develop system of state financial assistance that effectively rids universities of tuition fees.
(0 German Marks per semester)

1976 Legislation introduced that legally prohibits the charging of tuition fees.
(0 German Marks per semester)

2005 Legislation prohibiting tuition fees challenged and overturned as unconstitutional.
(7 states reintroduce fees; 500 Euros per semester maximum)

2006 Federal government abolishes legislation that prohibited fees, but most states refuse to reintroduce them, opting instead to abolish them one-by-one over the next 9 years.

2015 Last holdout state (Lower Saxony) abolishes its tuition fees.

Vocational Education and Training

Duale Ausbildung (Dual Education) simultaneously instructs and trains students at vocational schools in 1 of 356 apprenticeships with private corporations that follow strictly regulated federal standards as they teach students the theories and skills necessary to proceed in their desired vocation.

This leads to:

• (Symbol for low economic demand) Lower demand for university education.
• (Symbol for low percentage) Lower percentage of university students nationwide.
• (Symbol for ready worker possibly wearing hard-hat) Lower percentage of persons entering the workforce requiring skills-based, on-the-job training.

Because of an educational model that holds both public institutions and private corporations responsible for educating its workforce, Germany is one of only three nations worldwide whose unemployment rate did not rise but actually declined during the Great Recession

Comparing Track Records: The Fact Checker’s Guide to German vs. U.S. Models

Germany:
379 institutions of Higher Ed
2.4m students
3% of total population
28% of population hold degree
15% higher ed costs covered by private spending (i.e., out of pocket)
+7% increase in public spending on education after Great Recession
2.5% unemployment rate for students with degree after Great Recession
87% employment rate for students with degree after Great Recession
0% of students graduate with longterm federal student loan debt
Total longterm student loan debt: $0

U.S.:
4,726 institutions of Higher Ed
21m students
5.7% of total population
31% of population hold degree
65% higher ed costs covered by private spending (i.e., out of pocket)
-4% decrease in public spending on education after Great Recession
4.5% unemployment rate for students with degree after Great Recession
79% employment rate for students with degree after Great Recession
69% of students graduate with longterm federal student loan debt
Total longterm student loan debt: $1.2 trillion

Problem: Can the German Model Scale?

Answer: Simply rearranging what we already spend on higher education can make it free.
Total Federal Financial Aid for 2013: $69 billion[4]
Needed to cover tuition payments for all public university students: $62.6 billion

But what about private colleges?

75% of American undergraduates are educated by public institutions
25% of federal aid goes to for-profit colleges

For-profit sidenote:

Only 10% of US students attend for-profit colleges
and a full 54% of enrollees won’t graduate [5]
Meaning that 25% of federal aid goes to around 5% of eventual graduates.

Bottom line: Cutting out low performance for-profit institutions would enable anyone in the US to go to a public university for free
AND the subsidization of a large number of private institutions.

Germany is the largest country and economy in the world to make higher education free. Which makes them the closest analog to what free education in the US could look like. School shouldn’t cause crippling debt. Schools should also be able to effectively prepare students for the workforce. Luckily we’ve got an example in one of the most vibrant democracies in Europe.

Sources:

• OECD (2014), Education at a Glance 2014: Highlights, OECD Publishing, Paris. DOI: http://dx.doi.org/10.1787/eag_highlights-2014-en
• http://www.oecd.org/edu/Germany_EAG2013%20Country%20Note.pdf
• http://www.newstatesman.com/education/2014/10/how-germany-managed-abolish-university-tuition-fees
• http://www.theatlantic.com/business/archive/2014/01/heres-exactly-how-much-the-government-would-have-to-spend-to-make-public-college-tuition-free/282803/
• http://forprofitu.org/fact-sheet/