Germany Goes for Free Tuition, But Will Other Countries Follow?

While tuition and fees for higher education have risen over five times the rate of inflation in the past 30 years — and have doubled at public schools in the last 20 years — this week Germany made an announcement that it has returned to a tuition-free higher education system.

As Mark Huelsman of Demos says, in the US, “Eliminating tuition entirely would be a unicorn.” But Slate’s Jordan Weissman and others have shown that it could be done simply by rearranging what is already being spent on student financial aid. However, since tuition and fees make up less than half of what it costs to go to college, with the rest of the cost going to eating, transportation, and buying books and supplies, free higher education would not really be free.

Demos has just released  The Affordable College Compact, a proposal that would explain how to provide states a federal matching program in return for a commitment to affordability, which could ultimately lead to debt-free higher education for low-income and middle-class students at public schools, and, at the same time, providing continuous incentives to re-invest to even higher levels of per-student funding.  There would then be flexibility, federalism in colleges and universities, and would provide both institutions and students with the funding that has been cut so fiercely in the last 30 years.

The Canadian Federation of Students (CFS) applauded the Germans, since student debt in Canada has now risen above $15 billion. CFS believes that education should be free. Its national chairwoman said:

“Canada’s federal government should look to Germany’s system as an example of one of the best ways to ensure access to post-secondary education and ensure students are getting the training and skills they need to participate in the labour market.”

In Canada, tuition has tripled over the past 20 years, as reported by the Canadian Center for Policy Alternatives (CCPA). An average of $5,959 per school years is paid by undergraduates and is projected, by CCPA, to rise to $7,755 over the next four years, writes Sunny Freeman, reporting for The Huffington Post Canada. Those Canadians opposed to free tuition say that it would be a terrific burden to the tax system and would damage the quality of education, teaching, and resources.

A CCPA official says:

“It simply means the decision has been made to let them pay it back through the tax system, which is automatically tied to their income, and which is a much more progressive form of repayment that doesn’t result in students starting off their careers deeply in debt. Because when that happens, society pays the price too, in the form of lost productivity and delayed contributions.”

Colin Busby, senior policy analyst at the C.D. Howe Institute, says that this idea would not necessarily work because of the lack of history of free tuition and because this expansion of the system would require a substantial tax increase.

Last week, Lower Saxony became the last of seven German states to abolish tuition fees, which, by US standards, were already exceptionally low says Joaquim Moreira Salles of ThinkProgress. The only time Germany charged tuition began in 2006, but it was so unpopular that one by one states began dropping it.

“We got rid of tuition fees because we do not want higher education which depends on the wealth of the parents,” Gabrielle Heinen-Kjajic, the minister for science and culture in Lower Saxony, said in a statement. Her words were echoed by many in the German government. “Tuition fees are unjust,” said Hamburg’s senator for science Dorothee Stapelfeldt. “They discourage young people who do not have a traditional academic family background from taking up study. It is a core task of politics to ensure that young women and men can study with a high quality standard free of charge in Germany.”

Free education is the norm in most of Europe with a few exceptions like the UK. The government lifted a cap on university fees in 2010 and it reportedly cost more money than it brought in because of students’ failure to pay back loans.

In an opinion article by Christopher Denhart for Forbes, Denhart notes that Germany has the second highest income tax burden of all the Organisation of Economic Cooperation and Development‘s 34 countries. In 2012, the tax burden figure was 49.8%, which will likely increase because of the free higher education development.

Students are taking longer to graduate, which further compounds pricey per-semester costs. In the US, there has been a rise of the five year degree. Of the 60% of students who graduate from public schools in the US, more than half take longer than four years to do so.  If college were free and everyone decided to take an extra year to finish, the price of higher education on the public money coffers could increase by as much as 33%.

Another negative aspect of free tuition is revealed by the 46% of recent college graduates, according to the Federal Reserve Bank of New York, who are working in jobs for which they are overqualified. Nearly half of UK graduates were working non-graduate jobs in 2012.

Such figures suggest that too many are being funneled into higher education already. No tuition education will only increase the underemployment problem.