Foreign students contribute far more to the German economy than they cost
The absence of tuition fees means that many international students can study more cost-effectively in Germany than they can in their home countries.
But that's not to say that foreign students get all of the benefit of leeching off of Germany's education system without giving anything back.
In fact, the investment in foreign students' education by the German state pays for itself within three years of graduation, and eight times over in the course of a lifetime, according to a
study
by the Institute for Economic Research (IW) – making it clear how important international students have become to Germany's economy and future prosperity.
Approximately 79,000 international students began their studies in Germany in 2022. The IW study looks at the projected economic impact of this cohort from the start of their studies through to retirement.
Comparing the total taxes and social security contributions these students are expected to pay over their working lives in Germany to the public benefits and state investments they're likely to receive, the researchers calculated a total surplus of €15.5 billion.
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Everything that changes for international students in 2025
The figure of €15.5 billion is based on the assumption that around 40 percent of the 2022 cohort will remain in Germany.
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If 30 percent of the cohort remains in Germany, the study projects that their net fiscal contribution will exceed government expenditure by €7.4 billion.
If 50 percent of the cohort stays in Germany, the figure rises to €26 billion.
In the first scenario, where 40 percent of students stay long enough to work and pay taxes, their contributions will exceed the costs of their education within just three years of graduation.
Germany holds one of the world's highest retention rates for international students. According to a 2022 OECD study, 45 percent of foreign students were still living in Germany ten years after enrolling.
'Investing in the education of international students strengthens the skilled labour base in Germany, which drives economic growth in the long term,' said IW Director Prof. Dr. Michael Hüther.
One unexpected insight provided by the IW study is the degree to which international students start contributing to the German economy even before they graduate, by taking on part-time work (often connected with their field of study).
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While international students in Germany are permitted to work during their studies, however, the challenges associated with finding employment and securing the necessary visas can rise substantially after graduation.
The IW study reinforces the argument for streamlining residency applications and work permits for former students.
In order to keep graduates in the country – and to maximise their economic and academic impact – the study recommends introducing a range of improved integration policies, including tailored immigration support, smoother legal processes, and targeted recruitment strategies.
READ ALSO:
Could foreign medical students in Germany be charged tuition fees?
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