The True Costs of Free College
Germany currently suffers a workforce crisis and has implemented free tuition programs in an effort to combat them. Similar to their Nordic neighbors to the north (Sweden, Denmark, & Norway), the idea was that free college would train younger Germans and international workers to enter the workforce, replacing the aging working class of Germany without taking on massive student debt. Sounds great right?
Eh….not so much. The hard facts of these countries’ free education system explain why free college is a really, really bad idea.
1) “Free college” is not really free.
I hate to be captain obvious, but unless we find a cost-free way to create buildings, textbooks, computers and somehow magically pay teachers and administrators; college cannot be free. Turns out, colleges in Germany are quite expensive, with taxpayers shelling out upwards of 50% (as in half) of their income.
But even with governemnt subsidies, schools in Germany (also the Nordic countries) are not actually free to the students, either. In fact, students of Sweden’s “free college” program carry an average debt of $19,000, just 30% shy if the US student debt. On top of that, 85% of Swedish students graduate with debt, vs only 50% of American students.
2) Germans have lower enrollment and graduate rates than the rest of the world, far lower than the US.
Despite having free college available to the public, Germany has both a lower enrollment rate and lower graduation rate than other developed countries. Even with much higher tax burdens to pay for free education, Germany’s college enrollment rate is shockingly low when compared to that of the U.S.
When contrasting raw data from the worldbank, we see that Germany’s enrollment rate is a stark 61%, making them one point ahead of Albania and far below the United States, which boasts an 89% enrollment ratio. The numbers are no better for Germany when it comes to graduation rates. Where Germany still has not reached the international average.
Harsh Tax Wedges
This stark picture becomes worse when considering the significant tax wedges (dollar measurements of income tax rate, the higher the tax burden the higher the wedge) created by free tuition programs. A comparison of 4 countries with free college programs, (Norway, Denmark, Sweden, and Germany) in contrast with the U.S. suggests that free public college creates significant tax burdens and yields generally unfavorable results.
German taxpayers pay out nearly 50 cents on every dollar while Americans pay out roughly 32 cents on every dollar. Granted, free tuition is not the sole driver of tax rates, but all countries with such programs have income taxes significantly higher than the U.S. Of particular note, these numbers suggest that as tax burdens for free college programs increase, enrollment actually decreases.
3) Foreigners, including Americans, take advantage of Germany’s free education.
Part of Germany’s free college plan was to attract foreign students to get an education and join the workforce. On paper, students should pay for themselves if they stay in Germany for at least five years paying German taxes. While foreigners flock to Germany’s free schools for cheap degrees, they generally take their skills back home with them. Germans have referred to this debacle using words like ‘brain drain’ and ‘exodus from Germany.’
Americans students are doing this in droves, As noted by NPR, more than 4,000 Americans were studying in Germany in 2015. This number represents a 56% increase since 2003. A perusal of this WaPo comment section shows how many Americans are all for studying in Germany. Very few, if any, have intentions on staying in Germany for 5+ years. This BBC article includes a step by step plan of how to make German workers pay for your education.
In 2015, the Expert Council of German Foundations on Integration and Migration (SVC), a German think tank, published a report detailing the perilous nature of the country’s free college system.
The report found that while nearly 80% of the over 300,000 international students currently in school said that they were sure they wanted to stay in Germany, more than half of these international students leave Germany after their studies. International students in Germany are also 13% more likely to drop out than German nationals. (41% to 28%)
4) Too many students are taking non-career courses and spending too much time in school.
The Local, which offer’s Germany’s news in english, explains that many students in German universities are spending six years just to finish undergraduate programs before diving into “lengthy masters course(s).” With such inexpensive school, many students becomes career students, spending years and years studying largely unmarketable topics while never gaining experiences needed for employment.
The problem of the perpetual student is not unique to Germany. However, is is notorious in Deutschland. So much in fact, that Germans use the word, “Dauerstudenten” (Eternal student) to describe these people.
The dauerstudenten epidemic has faced serious concern in Germany, including this interview with a man named Wulf Müller-Wildberg, who attended 57 semesters of free college. You can read the interview yourself, but unless you sprechen sie deutsch, a (rough) google translated version will help you decipher. Here are a few highlights from said (rough) translation (Did I mention that the translation is rough?):
Interviewer: Mr. Müller-Wildberg, which courses you have taken since 1974?
Müller-Wildberg”At that time I had already trained as a gardener behind me. However, because of “chronic underperformance” I get since I was 31 years old, an early pension. So I could begin to study. That the pension was more luck than brains.”
“After four semesters English and German to become a teacher at the University of Munich I changed but for medicine. After 14 semesters at the University of Giessen, although I have taken exams, but not my approbation. Since then I study a little psychology, philosophy and Portuguese in Munich”
Interviewer: Did you never have a bad conscience that you take young candidates to study space?
Müller-Wildberg: “I never had, because getting enough people could study medicine.The state simply does too little for the disabled. A study course and a long study, I found only fair. Furthermore, I have not even exhausted all possibilities. For medicine I am specially changed after casting. Had I submitted my severely handicapped, I could have stayed in Munich.”