For years, the debate over university tuition fees has been framed in simple terms: do they discourage students from pursuing higher education, or are they a necessary way to fund universities? A new discussion paper by Marc Bachmeier and Jan Marcus offers new insights into a long-debated question—one that goes beyond just looking at how tuition fees affect university enrollment and instead examines what really matters: how they impact graduation rates.
The study focuses on a key moment in Germany’s education system when several states introduced modest tuition fees of around EUR 1,000 per year in 2006-07. As expected, fewer students enrolled in university after the fees were introduced. But the more interesting question is this: how many of those who decided not to enroll would have actually graduated if they had enrolled? The answer challenges some common assumptions.
While tuition fees do reduce graduation rates, the decline is not as dramatic as many might think. Many of the students who chose not to enroll due to tuition fees would likely not have completed their degrees even if they had enrolled. This means that previous studies, which focused only on the drop in university enrollment, may have overstated the negative impact of tuition fees. Instead, the real effect is more nuanced.
At the same time, the study reveals a concerning reality. Students from disadvantaged backgrounds are the ones most affected by tuition fees, which suggests that fees could deepen existing socio-economic inequalities. If students from wealthier regions are more willing to absorb the cost while those from lower-income backgrounds hesitate, the result is a system where education becomes less accessible to those who need it most.
Another unexpected finding is that tuition fees might serve an unintended purpose: reducing the number of so-called “ghost students.” These are students who enroll in university not because they intend to graduate, but because enrollment grants them benefits like subsidized public transport or health insurance. By introducing even a modest cost, tuition fees seem to discourage this kind of non-serious enrollment, ensuring that university spots are taken by students who genuinely intend to complete their degrees.
The study, which was funded by the German Research Foundation (DFG), also finds that tuition fees do not affect all students in the same way. Women seem to be more discouraged by tuition fees than men, and students in fields like humanities and social sciences are more affected than those in science, technology, engineering, and mathematics (STEM). One possible reason is that STEM degrees tend to lead to higher-paying jobs, making the cost of tuition feel like a worthwhile investment.
Ultimately, this research challenges the idea that tuition fees are purely good or bad, showing instead that they reshape who enrolls, who graduates, and who gets left behind. While fees may reduce unnecessary enrollment, they also risk deepening inequality by deterring students who might have succeeded. The real question is not just whether tuition fees should exist, but how they can be designed to support serious students without creating new barriers.
On the authors
Marc Bachmeier
Doctoral researcher at the Department of Economics at Freie Universität Berlin, specializing in public economics and the economics of education.
Jan Marcus
Professor of Applied Statistics at the Freie Universität Berlin, member of the Berlin School of Economics, and affiliated with the Institute of Labor Economics (IZA), a leading international research institute in labor economics. His research focuses on the economics of education, health, and labor, with a strong emphasis on policy evaluation using advanced econometric methods.
