Even if they receive free education, foreign students are a huge financial benefit to Germany, according to a recent economic study. More is now being done by the German industry to attract international students.
According to a study released last week by the German Economic Institute (IW), international students contribute billions of euros to Germany’s budget and aid in promoting economic expansion.
The 79,000 foreign students who started studying in Germany in 2022 alone will pay nearly €15.5 billion ($16.8 billion) more in taxes and social security contributions over the course of their lives than they will receive in benefits, according to calculations made by the Cologne-based researchers.
The results demonstrated that “international students are an asset to our country in many ways, academically of course but also economically,” according to a statement released by Joybrato Mukherjee, president of the German Academic Exchange Service (DAAD), which commissioned the study.
Germany: Good For Staying
For international students, Germany has a favorable “staying rate”: About 45% of those who entered Germany on a student visa in 2010 remained there ten years later, per an OECD study from 2022. The IW discovered that they had already more than paid for their education by that point. It determined that if 40% of students remain for three years after their studies are over, the cost of their education is covered by their taxes and social security contributions.
Germany has made an effort to establish the legal framework necessary to encourage international students to remain in the nation. “In the Anglo-Saxon world, it isn’t the case everywhere that they really want international students to stay,” he stated. “In fact, there are occasionally legal obstacles to it.”
It appears that industry in Germany has started to view university campuses as recruitment grounds, whereas in other countries, foreign students are primarily viewed as a source of additional revenue for universities. Ebaid said, “The system that is already in place is very good, in my opinion,” having personally witnessed this. “Workshops on CV preparation, interview techniques, and breaking into the German market were offered by my university. Every year, they bring businesses to the university campus to host job fairs.
The True Economic Impact of International Students
It is impossible to overestimate the economic impact of international students. Additionally, it cannot be restricted to living expenses such as transportation, food and clothing, and tuition costs.
For instance, the United States is a popular destination for international students. Based on data from the US Department of Commerce, the Institute of International Education (IIE) estimates that in 2016, foreign students made a substantial $39.4 billion contribution to the US economy.
Even though tuition plays a significant role, they also make other contributions to the economy. “Students from around the world who study in the United States often lead to longer-term business relationships and economic benefits, and they also contribute to America’s scientific and technical research and bring international perspectives into US classrooms, helping prepare American undergraduates for global careers,” according to IIE.
Give But Get Back More
This holds true for all host nations, including those where generous funding is provided to international students. The myth that international students are a waste of public funds has been dispelled by a decades-long study by the Danish think tank DEA, which found that they made a net total economic contribution of 165.6 million Danish krone ($23.8 million). DEA “There is really good business for society in increasing both recruitment and retention as long as the labor market can absorb more international students,” stated Martin Junge, Head of Research.
An alternative perspective? In terms of the living and educational costs they contribute to the economy, international students are not socially isolated. It is comparable to a potluck gathering where each person contributes a dish. According to MBA admissions consultants MBA Crystal Ball, “only in this instance, despite the funding and aid given to some of the students, their expenses in the foreign economy bring in a very positive impact.” “The ability of a country to persuade others to do what it wants without force or coercion” is the definition of “soft power.”
International students also play a crucial soft role in this regard, according to Hollie Chandler, a senior policy analyst at Russell Group. After graduating, international students strengthen trade, research, and diplomatic ties by acting as unofficial ambassadors for the UK and our universities back home, enhancing the nation’s soft power. Additionally, some foreign graduates will stay in the UK to work, with many taking professional positions in high-value industries, contributing more to taxes and National Insurance, and building up the country’s skilled labor force, she says.
International students undoubtedly benefit greatly from their time overseas. Furthermore, these connections are reciprocal rather than one-sided. International students not only contribute themselves and their tuition money, but they also offer their host nations a wide range of present and future advantages!
