Financing for equity in higher education
1. Education resources to subnational governments
2. Education resources to institutions
3. Education resources to students
4. Support for students' living costs
Introduction
Key financing indicators (UIS Data)
The gross enrolment ratio for tertiary education for both sexes increased from 60.9 in 2013 to 78.59 in 2023. The initial government funding per tertiary student as a percentage of GDP per capita declined from 37.68 in 2012 to 32.47 in 2022. Data on initial household funding per tertiary student, as a percentage of GDP per capita, are not available from the UIS.
Tuition-free status
The education system in Germany comprises 16 federal states (Länder), with the legal basis for higher education provided by the Framework Act for Higher Education (Hochschulrahmengesetz). No single federal law directly mandates free tuition for German public universities; each Länder can impose study fees on students. In practice, all Länder have abolished study fees.
Governance
At the federal level, the Federal Ministry of Research, Technology, and Space (Bundesministerium für Bildung und Forschung, BMBF), restructured in 2025 from the former Federal Ministry of Education and Research, provides funding for national research programs and co-finances national initiatives.
At the state level, each Länder has its own Ministry of Education, which is responsible for allocating and overseeing the budgets of public higher education institutions. The Länder-level ministries handle basic institutional funding, monitor internal financial management, and manage multi-year development and financing agreements with universities. The Standing Conference of the Ministers of Education and Cultural Affairs (KMK) ensures the compatibility of the 16 systems by coordinating higher education policy across the Länder, setting standards for degrees and qualifications, and ensuring comparability and recognition of academic credentials.
1. Education resources to subnational governments
Subnational funding mechanisms
The Länder are primarily responsible for funding higher education institutions from their own budgets, accounting for 86.1% of total public higher education expenditure in 2024. Länder allocate funds directly to higher education institutions for core operations. Each institution submits budget estimates to the Länder ministry responsible for higher education, which coordinates these requests with other ministries to develop an annual or multi-year institutional budget.
Until 2015, federal support for higher education was available only through fixed-term programmes focused on research and infrastructure. A revision to the Basic Law in 2015 (Article 91b, paragraph 1) now permits the Federation to cooperate with Länder to permanently support higher education institutions with federal funds “in cases of supraregional importance in the promotion of sciences, research and teaching”.
The 2021 Future Contract for Studies and Teaching (Zukunftsvertrag Studium und Lehre stärken) is one of the primary mechanisms for permanent federal-Länder cooperation. Under this agreement, the federal government provides EUR 2.05 billion annually from 2024 onward, matched by the Länder, distributed to all institutions through a formula based on student numbers, graduates, and first-year students. This funding is intended to strengthen teaching quality across the system.
2. Education resources to institutions
Funding for private universities in the absence of public institutions
No information was found on mechanisms to provide institutional funding for private universities when no public university is available.
Allocation and equity
Government subsidies to public higher education institutions in Germany are allocated primarily by the Länder with support from the federal government, as outlined in the previous section of this profile. Most core funding comes directly from the Länder, which negotiate multi-year funding agreements with each institution. Universities submit budget estimates, and final allocations are determined through inter-ministerial agreement and parliamentary approval, after which funds are distributed and managed internally by each university under varying degrees of state oversight.
Federal-level allocations to universities in Germany do not systematically incorporate equity considerations into the primary institutional funding mechanism. The 2021 Future Contract for Studies and Teaching (Zukunftsvertrag Studium und Lehre stärken), which succeeded the Higher Education Pact 2020, distributes federal funds based exclusively on enrollment-related metrics. This formula contains no provisions for student demographics, institutional equity outcomes, or targeted support for disadvantaged groups. The only federal-level programme explicitly addressing equity in institutional funding is the Women Professors Programme 2030, a joint Federal-Länder initiative that provides funding to institutions that appoint women to professorships and demonstrate robust institutional strategies for equality.
3. Education resources to students
Admission for vulnerable groups
Federal-level provisions for the admission of people from vulnerable groups in Germany are limited. However, the Framework Act for Higher Education (Hochschulrahmengesetz) and Länder-level legislation require universities to ensure that students with disabilities or those in exceptional circumstances are not disadvantaged. This mandate applies to admissions, organization of studies, workload, and examination procedures. This obligation has been incorporated into all sixteen Länder higher education acts.
Scholarships, grants and loans for vulnerable groups
Germany’s federal government administers several scholarship programmes targeting vulnerable groups in higher education.
The Germany Scholarship (Deutschlandstipendium), jointly funded by the federal government and private sponsors, supports talented students of all nationalities and explicitly considers special circumstances, including chronic illnesses or disabilities, care responsibilities for children or relatives, first-generation academic status, and migration background when selecting recipients. However, these factors supplement demonstrated academic achievement.
The Hilde Domin Programme, managed by the German Academic Exchange Service (DAAD), is funded by the Federal Foreign Office and supports students and doctoral candidates who face threat or exclusion from education in their home countries due to persecution, political engagement, or their identity. Beneficiaries receive full financial support for their studies and mentoring to facilitate successful integration and academic achievement.
In addition to scholarships, the Federal Training Assistance Act (BAföG) provides need-based grants and loans for German citizens, EU nationals, and recognised refugees who cannot cover their education costs from personal or family income. Assistance is usually paid monthly for the standard period of study, with the amount adjusted based on factors such as parental income, the student’s own earnings and assets, and housing circumstances. The KfW Student Loan (Bildungskredit) provides accessible financing to students ineligible for BAföG. The programme provides government-backed, low-interest loans offered through Germany’s KfW development bank to help students who do not qualify for BAföG.
4. Support for students’ living costs
Transportation
Support for student transportation at the tertiary level in Germany is provided through a combination of federal and state funding mechanisms, with the primary instrument being the Germany Semester Ticket (Deutschlandsemesterticket), introduced in 2024. This nationwide ticket replaced previous regional semester-ticket arrangements and is jointly financed by the federal government and the Länder, with each contributing EUR 1.5 billion annually. Students pay a reduced monthly fee for a ticket that provides unlimited access to all local and regional public transport throughout Germany. The ticket excludes long-distance services.
Accommodation
Under the Federal Training Assistance Act (BAföG) students are entitled to a monthly accommodation allowance. The allowance is administered as a lump sum, with the rate determined by whether the student lives independently or with their parents. The programme is administered by state-level BAföG offices, though funding and regulatory frameworks are determined at the federal level.
Students who do not qualify for BaföG may be eligible for the housing benefit Wohngeld, a federal and state-co-funded housing subsidy for low-income individuals. The average Wohngeld payment is calculated based on household size, income, and regional rent levels. Students who are eligible for BAföG are not entitled to Wohngeld.
The Study Start-Up Aid (Studienstarthilfe), introduced in the winter semester 2024/25, provides a one-time non-repayable grant of EUR 1,000 to first-year students under age 25 from households receiving unemployment benefits, social assistance, child allowances. or housing benefits. Funds may be used to cover rent deposits.
Textbooks
Germany does not maintain a dedicated federal subsidy programme specifically for textbook purchases at the tertiary level. Instead, support for textbooks is integrated into broader student financial assistance mechanisms and institutional library services. The BAföG basic requirement is calculated to cover general living costs, including study materials such as textbooks, though no earmarked allocation exists.
As noted above, the Study Start-Up Aid (Studienstarthilfe), introduced in the winter semester 2024/25, provides a one-time non-repayable grant of EUR 1,000 to first-year students under age 25 from households receiving unemployment benefits, social assistance, or child allowances. or housing benefits. Funds may be used for computers, learning materials, and textbooks.
