How Germans Control the Cost of Higher Ed

Th University of Cologne: spartan but inexpensive.

The University of Cologne: spartan but inexpensive.

by James A. Bacon

Imagine a college or university stripped down to its essentials: inculcating its students with a body of knowledge and critical thinking skills. Imagine no basketball teams, no dormitories, no gymnasium, no frills. Imagine professors who spend most of their time teaching by delivering lectures in large auditoriums, not engaging in the publish-or-perish rat race. Imagine a college that doesn’t support vast bureaucracies to sort through student admissions, promote economic development or minister to the latest government concerns about diversity, sexual assault and binge drinking.

Then, imagine that institution offering free tuition to everyone meeting the admittance criteria, and students graduating without $25,000-plus in student loan debt.

There are no universities like that in the United States, certainly not Virginia. But that’s pretty much what the German higher education system looks like.

In a fascinating article in Marketplace, Kirk Carapezza profiles the University of Cologne, Germany’s largest university, with 48,000 students. The university includes a law school and medical school. The average cost of an undergraduate degree in Germany is $32,000, which the German government provides for free.

Here in Virginia, VCU students will pay $63,000 in tuition and fees (assuming 2015 rates stay constant, which they won’t), with the result that many will carry tens of thousands of dollars in student debt when they graduate (assuming they do graduate). And they will pay that astronomical sum despite the fact that the Commonwealth of Virginia pays $27,000 per student this year in state support at VCU — only $5,000 per student per year shy of what it costs Germany to educate its students for free!

The problem in Virginia, as in the rest of the United States, is not that the state fails to support higher education, it’s that colleges and universities have let costs run totally out of control. Here are some of the ways the University of Cologne differs from the U.S. system while still managing to provide a quality of education commensurate with one of the world’s leading economies:

  • Campus. The University of Cologne doesn’t lavish money on architectural extravagance. Buildings are bland and utilitarian.
  • Room and board. The University of Cologne doesn’t have dormitories and food courts. Students live off campus.
  • Garages. No garages at the University of Cologne — but there is ample parking for bicycles.
  • Big time sports. Sorry, sports fans, no football teams, no, basketball teams, no Title IX athletic programs, and no athletic facilities needed to support them.
  • Faculty. Professors teach more than American professors, earn less and spend more time handling administrative tasks, which keeps down administrative bloat.
  • Campus activities. Nope, no active student clubs.
  • Administration. The article doesn’t address this, but I would conjecture that it’s a factor: Germans don’t have the obsession with race, ethnicity and gender that has given rise to a vast “diversity” administrative apparatus in the U.S. And the non-residential experience probably avoids the problems arising from America’s alcohol-fueled hookup culture that generates so many charges of sexual assault, along with the attendant bureaucracy to deal with it.

Bacon’s bottom line: I’m not suggesting that Virginia switch wholesale to the German model. If people are willing to pay a premium to attend the University of Virginia, or even VCU, then they should be allowed to. But Virginia’s system of higher education also should provide a stripped-down educational option focusing on academics that enables students to forego the “residential experience” in exchange for vastly lower tuition and fees. It works for the Germans. It could work for us, too.

(Hat tip: Don Rippert.)

There are currently 1 comments highlighted: 116863.

26 responses to “How Germans Control the Cost of Higher Ed

  1. Pingback: Bacon’s Rebellion: How Do You Make College Affordable? (Hint: VCCS) | Bearing Drift

  2. Some years ago, I remember an article in Forbes citing the tuition at Allegheny College in Pennsylvania, a small but respected liberal arts college, with a campus yet, as $7000. Everyone else was charging over 30K. Even today, there are good colleges like Hillsdale College that charge in 2015-2016 as follows:
    Tuition $23,840
    Room $4,800
    Board (Knorr Family Dining Room) $4,960
    General Fees $752
    Total $34,352

    They even have a football team. But Hillsdale takes no federal money. Maybe that’s the answer.

  3. Jim, you seem to invite the answer adopted in Tennessee, free community college. With college virtually a required extension of high school these days, why not offer it like high school: at state expense in a high school like commuter environment? And with transfer rights to state supported residential colleges if grades are OK? Makes sense to me, and it might apply a little competitive pressure where it’s needed on those residential colleges to prove their worth.

  4. Perhaps I’m mistaken, but I thought Mason was sort of suppose to do this when U.Va. granted it independence? I thought it was supposed to be a regional school to serve NoVa’s higher ed needs. Obviously, it quickly became a “national university”…with all the bells and whistles and it recruits around the state and nation for students.

  5. So why doesn’t a German University open a branch in the United States? A number of US colleges have branches or campuses overseas. A significant number of German businesses operate in the US. The competition would be good for American colleges and universities.

    Looking back on my college career as a commuter student, I might well have elected a utilitarian college.

    • well for one thing – many of our kids are academically deficit in being able to handle what German kids can.

      we rank 25th. Germany ranks 10 or 12th (no great shakes) but our kids rank 25-30.

      http://www.businessinsider.com/pisa-rankings-2013-12

      our kids are not only going into debt – they purposely seek out academically mediocre curricula.

      imagine owing 50K for an education that sends you up against German college graduates for global jobs.

      In this country – we’re opposed to academic standards.. like Common Core and we’re in favor of colleges dropping their SAT requirements.

      we ourselves are at the root of much of this.

      • We’re ships passing in the night. I’m just looking for a way to get some entity to start a bare-bones university in the United States.

        I do agree with your sentiment that we need to produce better educated students, including appropriate career education opportunities.

  6. re: ” But Virginia’s system of higher education also should provide a stripped-down educational option focusing on academics that enables students to forego the “residential experience” in exchange for vastly lower tuition and fees. ”

    and

    ” With college virtually a required extension of high school these days, why not offer it like high school: at state expense in a high school like commuter environment?”

    We’re halfway there with DE – Dual-enrollment for K-12 and Community College.

    I don’t think it’s realistic to think Virginia can “force” big sports schools like UVA and VaTech to offer a bare-bones option.

    but I DO THINK it’s the responsibility – duty of the State to stand-up new 2+2 colleges, or incentivize existing schools to do so. To basically create price/value competitors where students get vouchers to attend.

    Don’t try to change UVA or Tech – let them do what they think works for them – but step up for the kids who don’t want the debt.

    I don’t blame the schools. They are providing what many of their customers want – which is NOT a bare-bones option but instead the full monty college “experience” – egged on by parents who want their kids to have the experiences they did.

    but financing that “experience” with a loan is a prime example of how people – not govt – make “inefficient” choices.

    Who in their right mind would actually finance for decades – things like student fees?

    Well it turns out – a bunch of folks will do just that so that a decade or more after graduating from college – they are STILL paying student fees and cannot afford to buy a house or start to save/invest for their future.

    Perhaps Virginia could require a mandatory course for ALL kids before enrolling in College – called Student Loans and Debt 101 but I’m not sure how successful it would be – because in many cases Mom&DAD are also okay with their kids drowning in debt (which is sort of a funny irony for Moms/Dads who blather on about the US Govt – deficit and debt… and the “crushing” debt that their kids will inherit from others entitlements!)

  7. I agree: the European (not just German) system is more efficient in this regard: there are national exams and the score determines whether the student can enter a university, and which university (in other words ‘daddy’ does not have to donate). It is also very notable that those universities are not afterthoughts to the football or basketball team … they exist to educate.

  8. “but financing that “experience” with a loan is a prime example of how people – not govt – make “inefficient” choices. ”

    Is it because they make inefficient choices, or is it because there are very few other choices, since in Virginia at least, the government, yes government, is subsidizing the big guys and increasing the amount of loans available, and at least trying to make them “free” (See, eg. Hillary proposal, and for that matter Barack proposal) and tipping the deck against little guys who might offer options. You don’t explain why Hillsdale is able to offer a college education at $34 K when it’s pretty obvious. They aren’t respondent to the federal government. They don’t have to engage in Title IX distractions, they don’t have to engage diversity idiots, they don’t have to spend millions on sexual assault rules, training and other idiocy.

    The other factor, of course, is impacted information and supply. Contrary to what you posit, more and more parents are getting the point: High price colleges may not be worth it. Why do you think the Board of Visitors tried to throw out good ol’ Teresa at U.Va? She was not, and still does not get it, but those on the Board from the private sector, namely bad ol’ what’s her name from Virginia Beach, did get it. Higher education is changing. Higher education, particularly in Virginia, is so hide bound by government rules, tenure, etc. that it is a severely impacted organization and will have difficulty changing. It may not be a pure monopoly, but it sure acts oligarchic.

    But you refute in your own post when you say the State ought to provide more choices

  9. Larry G
    >>”but financing that “experience” with a loan is a prime example of how people – not govt – make “inefficient” choices. ”
    >>
    Is it because they make inefficient choices, or is it because there are very few other choices, since in Virginia at least, the government, yes government, is subsidizing the big guys and increasing the amount of loans available, and at least trying to make them “free” (See, eg. Hillary proposal, and for that matter Barack proposal) and tipping the deck against little guys who might offer options. You don’t explain why Hillsdale is able to offer a college education at $34 K when it’s pretty obvious. They aren’t respondent to the federal government. They don’t have to engage in Title IX distractions, they don’t have to engage diversity idiots, they don’t have to spend millions on sexual assault rules, training and other idiocy.

    The other factor, of course, is impacted information and supply. Contrary to what you posit, more and more parents are getting the point: High price colleges may not be worth it. Why do you think the Board of Visitors tried to throw out good ol’ Teresa at U.Va? She was not, and still does not get it, but those on the Board from the private sector, namely bad ol’ what’s her name from Virginia Beach, did get it. Higher education is changing. Higher education, particularly in Virginia, is so hide bound by government rules, tenure, etc. that it is a severely impacted organization and will have difficulty changing. It may not be a pure monopoly, but it sure acts oligarchic.

  10. VCU is a second-tier public school outside of the US News top 150 rankings for national universities. I assume the full-sticker cost of 63k is for out-of-state students, but that is still ludicrous.

  11. Is it because they make inefficient choices, or is it because there are very few other choices, since in Virginia at least, the government, yes government, is subsidizing the big guys and increasing the amount of loans available, and at least trying to make them “free” (See, eg. Hillary proposal, and for that matter Barack proposal) and tipping the deck against little guys who might offer options. ”

    people ALWAYS have choices. blaming others for the choices they make is silly.

    “You don’t explain why Hillsdale is able to offer a college education at $34 K when it’s pretty obvious. They aren’t respondent to the federal government. They don’t have to engage in Title IX distractions, they don’t have to engage diversity idiots, they don’t have to spend millions on sexual assault rules, training and other idiocy.”

    if that’s the actual case – then explain why that model is not catching on across the country…..

    “The other factor, of course, is impacted information and supply. Contrary to what you posit, more and more parents are getting the point: High price colleges may not be worth it.”

    wishful thinking Crazy… show me the beef…

    ” Why do you think the Board of Visitors tried to throw out good ol’ Teresa at U.Va? She was not, and still does not get it, but those on the Board from the private sector, namely bad ol’ what’s her name from Virginia Beach, did get it. Higher education is changing. Higher education, particularly in Virginia, is so hide bound by government rules, tenure, etc. that it is a severely impacted organization and will have difficulty changing. It may not be a pure monopoly, but it sure acts oligarchic.”

    I don’t think we gain insight on these issues by invoking personalities whether it be Hillary or Teresa.

    UVA is not going to change as long as there is a steady supply of folks willing to pay premium prices for what they feel is a premium experience.

    Your premise is like saying people who buy BMWs will get tired of paying more for a mere car…

    it’s not the BMW folks. it’s the folks who can afford Chevy’s now being forced to go into hock for – a Chevy… with fancy accessories..

    I can guarantee you that the folks going in to super debt for a UVA “experience” are not from the inner cities or dirt-poor rural RoVA folks.

    it’s folks who fancy themselves as legitimate consumers of a UVA education.

    Sullivan has almost nothing to do with this and I can guaranteed you if the BOV took away some of the standard accouterments associated with the UVA experience – the parents would be hollering like stuck pigs.

    sorry – I don’t think UVA needs to change. What is needed is competitors … who DO offer a bare-bones education that does not required going 50K into debt – then see if that option actually starts taking away enrollment from UVA and forces change – no matter if the top dawg’s name is Teresa or Cletus…

    Actually the guy you love to hate tried to do something – and failed:

    Obama administration retreats from federal college rating plan

    http://www.washingtonpost.com/news/grade-point/wp/2015/06/25/obama-administration-retreats-from-federal-college-rating-plan/

  12. LarryG I completely agree with you — when you say,

    “Sullivan has almost nothing to do with this and I can guaranteed you if the BOV took away some of the standard accouterments associated with the UVA experience – the parents would be hollering like stuck pigs. . . . I don’t think UVA needs to change. What is needed is competitors … who DO offer a bare-bones education that does not required going 50K into debt – then see if that option actually starts taking away enrollment from UVA and forces change – no matter if the top dawg’s name is Teresa or Cletus…”

    I think you’ve hit right on the problem with the Dragas vs Sullivan episode. Dragas had the right idea and poor execution; all the alumni and faculty invoking memories as well as expensive traditions on the side of the traditional U experience did her plan in precisely because she had no sentimentality, not to mention clarity, about what might have to disappear under her vision of the future.

  13. *ahem*

    You know, EYE was the one who initially brought up Germany. I would like my credit as well, thankewe.

    • You did indeed, LOTFL.

      But I’m curious: Are you prepared for VCU to make the changes necessary to replicate the entire German higher-ed model, not just the free tuitions?

    • Ha ha. You did start the commentary on Germany. But, like so many prog-libs (whatever brand you folks are using these days) you brought up a European example without any context. I provided the context of German efficiency. Bacon really hit the nail on the head when he wrote, “And they will pay that astronomical fee despite the fact that the Commonwealth of Virginia pays $27,000 per student this year in state support at VCU — only $5,000 per student per year shy of what it costs Germany to educate its students for free!”

      The problem isn’t a lack of state funding for higher education. The problem is the prog-libs who run our higher education system being incompetent and unable to contain costs.

      Next up – voter IDs, land use rules and middle class tax rates in Germany.

      For a quick look at Scandinavia … http://thefederalist.com/2015/08/11/scandinavia-isnt-a-socialist-paradise/

      “In some ways, Sweden is now less progressive than the United States. Harvard professor Gregory Mankiw writes that the wealthiest decile of Swedes carries 26.7 percent of the tax burden. In The United States, the figure is a whopping 45.1 percent. Additionally, wealth inequality is more pronounced in Scandinavian countries than it is in the United States. In Sweden, Denmark, Finland, and Norway, the top decile of earners own between 65 and 69 percent of the country’s total wealth, an astonishing figure. Sanders is apparently unaware of this reality, given that one of his primary reasons for praising Scandinavia was their low levels of wealth inequality.”

      Bernie Sanders does have one redeeming characteristic – he can make Biden look smart.

  14. As long as UVA continues to be nourished as a public Ivy by the state government it faces no realistic competition for the best/brightest students in Virginia. So CrazyJD is right in the sense that for the truly elite HS students in the Commonwealth the only choice is UVA, lest they leave for the Ivy League or the few other state (public) schools that can compare. And a good number of the kids UVA rejects each year are extremely bright/talented, it would be nice to keep them in state from an economic development standpoint.

    I don’t know how feasible it is to establish competitors, as Larry suggests. I’d like to see technology disrupt higher ed in the way it has with so many other industries, but an academic reputation takes years, probably decades, to establish. Plus, the political and business elite that run the Commonwealth, a good chunk of them UVA alums, will always ensure that UVA remains the alpha dog. There are plenty of other fine state universities/colleges in the state, they just need to focus on those offerings/specialties they can do best and not try to compete with UVA (i.e. GMU being oriented as a commuter school for NoVA focused on regional workforce needs, a good point raised by someone in another thread).

  15. As always, you’re at your intellectual nadir when social issues come up…

    Germany doesn’t have to worry about racial and ethnic issues because A) The country wasn’t founded on slave labor centered around a racial caste system yet and B) The country spent a few years murdering as many members of the ethnic groups they didn’t like as possible. Dare to dream, I know.

    Also, as you pointed out the German schools have no social clubs so they don’t need to worry about Gonna Rape-a Freshman Iota chapter and all the attendant problems that come with it. But even if the two situations were equivalent you’re essentially chastising American schools for giving a shit about the well being of the students who pay thousands of dollars to attend.

    Speaking of which, you argue that price is an issue and student debt is an issue but then say if American universities want to charge as much as they can and students are willing to pay for it then what can you do? So what is your overall point? Prices are too high but if people are willing to pay them we should just let it happen but only to people that can afford it? Woo, knowledge economy!

  16. re: “branding”. ” an academic reputation takes years, probably decades, to establish.’

    re: ” but then say if American universities want to charge as much as they can and students are willing to pay for it then what can you do? ”

    re: ” technological disruption”

    I’m shooting for higher – the KIA of Higher Ed!

    It will be the “anti-Ivy” school

    The SUNY of Virginia – the SUVA…

    Don’t mess with UVA or VaTech – let them do their thing!

    It’s not the job of taxpayers to subsidize an Ivy League College.

    we’re trying to turn UVA into something not fish nor fowl.

    But Virginia does have a responsibility to make a basic college education affordable to all citizens and what we’re doing now is essentially making the high dollar path – the only path.

    If UVA and others don’t want to provide a basic option – then the State should pursue it through other means.

    Allowing the high dollar Colleges to essentially drive the lack of choice for affordability is what’s wrong.

    I dont’ have a thing against UVA or Tech of W&M – they know what they want to be and they know who wants their product.

    but taxpayer dollars ought not to be prioritized to their “deluxe” product but instead for a product that is affordable to most if not all citizens – and that was the original intended purpose of the State developing public universities to start with.

    Germany has a no-nonsense approach to higher ed for all citizens It does not prevent anyone from pursuing an upscale school but what it does do – is give every German citizen an genuine opportunity to further their education.

    Here – we’ve allowed the colleges to define the options… and none of them feel any responsibility to provide a basic option that is affordable.

    When you look at how Germany works verses how Virginia works – it’s embarrassing. No wonder we keep worrying about reduce Federal spending and having to bribe companies to move here.

  17. Great discussion! We definitely need to find an incentive to create low cost education. Eighty years ago, the taxpayer supported free college education at CIty College of New York was the only way first generation Americans could afford a college education.

    But first we have to acknowledge the source of demand for high-priced education. Students (and their parents) are looking for three things:
    1. A brand name that will ‘certify’ the value of student’s education, regardless of the student’s actual achievement;
    2. A network of alumni who will provide support in the student’s career development;
    3. A network of peers who will form a core of business relations in the future.
    People not involved in top-tier academia (top 20 of the U.S. News and World Report rankings) would be surprised at how closely deans follow those rankings – they help determine the value of the brand, the quality of the peer network and the loyalty of the alumni. As a result, professors are hired to support the brand name through publication, not to teach – US News values publication over education. But students and their parents are ok with this – education is not their primary goal, either. They are paying for the brand and the networks.

    Having said this, there is a large segment of students who are willing to sacrifice the benefits of the brand and networks in exchange for a lower cost. Whether this need can be met in the ‘market’ or requires taxpayer funding is a question for further discussion.

    • I wrote a paper about “affordability” in higher ed when I was in undergrad. Have any of you ever heard of the People’s College of Law? If not, do a Google search. The idea was very similar to the “stripped down” model that is discussed. A very modest facility with a faculty dedicated to debt-free students. It actually attracted some decent profs at first, but it quickly deteriorated. It’s still in existence, but its bar passage rate is 10%.

      Inthemiddle is correct. My paper concluded that the biggest difference in American v. European higher ed is that it is a “signal” function in American society. The “brand” of “Harvard” is a “signal” to employers, society, etc. about someone. The same “signal” is not attached to European higher ed in any way compared to the U.S. Yes there are “elite” universities. But European society doesn’t make all of the assumptions about your college choice that American society does. The closest parallel to American “signaling” you’d find in Europe is the London School.

    • You’re right about elite universities selling a brand. And they will continue to do so. The question really focuses on the middle-tier and bottom-tier universities whose brands have no cache. What they’re selling is an education. But they’re pricing the product as if they were selling a brand, and they’re pricing themselves out of the market. There is a huge pent-up demand by many Americans for a quality but low-cost education that gives them the skills they need to compete in the marketplace. But the public system of higher ed has nothing for them. The closest thing is the community college system, but that awards only associate degrees.

Leave a Reply