International students both bring billions of euros into Germany’s fiscal coffers and help stimulate economic growth, according to a study published last week by the German Economic Institute (IW).
The Cologne-based researchers calculated that the 79,000 international students who began studying in Germany in 2022 alone will pay almost €15.5 billion ($16.8 billion) more in taxes and social security contributions during their lives than they will receive in benefits.
Joybrato Mukherjee, president of the German Academic Exchange Service (DAAD), which commissioned the study, said in a statement that the findings showed that “international students are an asset to our country in many ways, academically of course, but also economically.”
Germany enjoys a healthy “staying rate” for foreign students: According to an OECD study from 2022, some 45% of people who came to Germany on a student visa in 2010 were still in Germany 10 years later. By then, they had already more than covered the cost of their education, the IW found. It calculated that the cost of educating students is covered by their taxes and social security contributions if 40% of them stay for three years after their studies have finished.
Why students like Germany
There might be plenty of reasons for international students to come to Germany — but one was particular attractive for Younis Ebaid, an Egyptian software developer who moved to the southern German city of Ingolstadt in 2021 to do an English-language master’s program in automotive engineering at the Bavarian city’s Technical University of Applied Sciences (THI).
“My first option was English-speaking countries, but it’s very, very expensive,” the 28-year-old told DW. “Germany was the most affordable option.” Most academic institutions in Germany don’t charge tuition fees, even for foreign students. Germany may have established free higher education out of a concern for social justice many decades ago, but it is now functioning as an incentive to attract skilled labor into the country.
“We only pay public semester contributions, which in my university was €60 per semester — that is even cheaper than my university in Egypt,” said Ebaid. Ingolstadt also had other notable attractions — the city of just 140,000 people is the home of Audi, which funds much of the research done at THI. Ebaid said many of his professors had experience working for the auto giant. “Basically the whole town breathes automotives, so it was a very good option,” he added.
Working students
But the cost of living in Bavaria is many times higher than in Egypt, and Ebaid could not live for free — which is why he found part-time work as a software developer in Munich, a job mediated by the university services.
Wido Geis-Thöne, senior economist at IW and co-author of the new report, said this was the main surprise of the study: “International students are already making contributions during their studies, because a large proportion of them get employment.”
The hard part, however, was the transition after graduation. Those university-mediated part-time jobs are only for students — once they’ve graduated, foreign students are at the mercy of the job market: And Germany’s automotive industry is currently weathering a rough patch. Both Audi and VW have been laying off workers in recent months.
“When I first came to Germany, the economy was in good shape,” said Ebaid. “But when I finished my master’s in 2024, the decline started. I applied for eight months until I got this full-time job.”
He managed to bridge that gap by working in restaurants and hotels, but now Ebaid is a software development engineer for a global Indian company that makes software for German carmakers. “I got lucky,” he said. “It was one of the few companies that was getting projects.” He mentions former co-students who have been searching for work for more than a year.
Here to stay?
Ebaid’s experience chimes in with IW’s findings. Geis-Thöne said that over the past decade or so, Germany has tried to create the legal framework to get foreign students stay in the country. “In the Anglo-Saxon world, it isn’t the case everywhere that they really want international students to stay,” he said. “There are actually legal hindrances to it sometimes.”
While in other countries foreign students are perhaps mainly seen as a source of extra income for universities, it seems that in Germany, industry has begun to see university campuses as recruitment grounds. Ebaid has seen this firsthand: “The system that is already in place is very good, in my opinion,” he said. “My university gave workshops about how to prepare your CV, how to do good in interviews, how to penetrate the German market. They also organize job fairs once a year, where they bring companies to the university campus.”
Ebaid says that his plan was always to stay in Germany after his studies — though now, given the country’s economic struggles, he is not sure he will be always be able to stay in Germany. “The main problem is that big companies are losing money, so they are closing a lot of projects and firing a lot of people,” he said.
Though Germany appears to be doing a lot right, there’s definitely room for improvement. Ebaid said his biggest problem with Germany was the lack of bureaucratic leniency when it comes to language. “In some government offices, the information is only available in German, and although the people there speak English, they prefer to only speak German,” he said. “This is something they can improve: To be a little bit tolerant towards the language barrier.”
Though he does not need to speak German at his own job, where the working language is English, Ebaid is learning German because he is hoping to apply for permanent residency. “If I was more proficient in German, my life would’ve been so much easier,” he said. “I have been rejected in so many companies because the working language was German.”
The IW made various recommendations for how better to integrate graduates into the workforce including a “targeted promotion of immigration” — but, it added, that shouldn’t necessarily be an end in itself. Educating people from all over the world is, the IW argued, ultimately to Germany’s advantage in itself, as it strengthens relations with other countries and fosters an international community among academics — even if, or especially if, they go back home after their studies.
Edited by: Rina Goldenberg
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