Germany’s international students return eightfold investment

The findings come from a study conducted by the German Economic Institute (IW) on behalf of DAAD, which reveals the powerful economic boost international students bring to Germany.

Around 405,000 international students are currently studying in Germany. The approximately 80,000 international students who began their studies with the intention of graduating in 2022 will pay almost €15.5 billion more in taxes and duties over the course of their lives than they receive in benefits from the German state, according to the research.

“Although most universities do not charge tuition fees, international students make significantly higher contributions to our society over the course of their working lives than Germany invests in their studies and beyond,” explained DAAD president Joybrato Mukherjee.

“International students are an asset to our country in many ways, academically of course, but also economically,” he continued.

International students make significantly higher contributions to our society over the course of their working lives than Germany invests in their studies and beyond
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Investing in international students pays off for Germany after just a few years. If 40% of a cohort remain in the country after graduation, their taxes and contributions will cover the costs of their higher education programs just three years after graduation, the research showed.

According to a recent DAAD survey, around 65% of students intending to graduate plan to stay in the country. OECD research showed that Germany currently has the highest retention rate of international students in the world, along with Canada. A decade after starting their studies, 45% of students are still in Germany.

If the retention rate remains stable, each new cohort of international students brings in €15.5bn more in taxes and duties for the public budget than the state has to spend over their lifetime. Even with a retention rate of only 30%, income would exceed expenditure by €7.4bn in the long term. If 50% of a cohort were to remain in Germany in the long term, the surplus would amount to €26bn.

IW Director Michael Hüther explained that investing in the education of international students strengthens the skilled labour base and thus economic growth of Germany in the long term.

“They help to overcome the challenges of demographic change. In addition, the investments are highly profitable from a public sector perspective and strengthen public budgets in the long term,” he said.

DAAD has strengthened its efforts to help international students successfully enter the job market through its skilled workers initiative.

“We must provide international students who familiarise themselves with Germany during their studies and want to stay here after graduation with the best possible support in starting a career,” said Mukherjee.

While India remains the largest source market for international students in Germany with over 49,000 students in 2023/24, China is the second largest at nearly 39,000, followed by Türkiye, Austria, Iran, Syria, Russia, Italy, Ukraine, Pakistan, Egypt, Morocco, Tunisia, Cameroon, and France.

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