Germany is falling behind in producing qualified university graduates because average public spending on higher education is well behind most other western nations, a new report said this week.

The rising cost of higher education means either increasing public spending or introducing private fees for schools and universities. Both are anathema in Germany, meaning relatively little is being invested in improving the educational system of Europe's largest economy.

The Paris-based Organisation for Economic Cooperation and Development (OECD) released its annual report on the state of education in the world's industrialized countries on Tuesday with a warning: Higher education in Germany is slipping behind other OECD members and in the near future, the situation is likely to worsen.

Public spending earmarked for education in Germany is relatively less than what some thirty other OECD members invest, according to the 2008 report. In the five year period between 2000 and 2005, the average spending on education as part of gross domestic product was 13.2 percent for OECD members, whereas German spending accounted for slightly less than ten percent of the federal budget.

Germans less qualified compared to others in OECD

More students however are enrolling in German institutions of higher learning and more are graduating, but they tend to be less qualified than their OECD counterparts. Germany does not produce enough homegrown engineering and science graduates for a growing number of high-tech jobs, which are often filled by skilled migrants from India and elsewhere. Even the number of medical graduates and teachers is expected to diminish soon.

"If this trend continues, the German economy will not be able to meet its demand for qualified people," said OECD's educational director Barbara Ischinger in an interview with Deutsche Welle radio.

Although the OECD report shows that the number of graduates from universities and tertiary institutions rose from 18 to 21 percent in the six year period to 2006, the average increase for OECD members during the same time bracket was considerably more—from 28 to 37 percent.

US spending way ahead of Europe

The United States comes out ahead of Europe as a whole, according OECD. American universities on average spent 24,370 dollars (17,200 euros) per student per year in 2005, compared with $10,474 among 19 OECD European countries, which are also EU members.

Only Switzerland, which is not a European Union member, comes close to American spending levels, with the Alpine country's public universities allocating $21,734 dollars to each student per year.

The demand for higher education among OECD nations keeps rising though. In the decade from 1995 to 2005, the number of young people attending university level programs increased from 37 percent to 57 percent.

Governments have generally reacted with three different approaches to such an upsurge in demand. The Scandinavian countries have revamped public expenditure to earmark more funds for public education, whereas the US and Japan have increased fees at state institutions, but offer loans and scholarships to lower income students.

Increase public spending or introduce tuition fees?

Germany has opted for the third policy choice that prohibits public educational institutions from charging any fees at all, but keeps public spending stagnant, which has only created budgetary problems for universities that the OECD said would impact on the quality of educational programs.

The report said "While choices between greater public investments and a larger share of private money are difficult to make, doing neither in the face of the rising demand for more and better tertiary education seems no longer an option."

Annegret Kramp-Karrenbauer, who heads the Standing Conference of the Ministers of Education and Cultural Affairs of Germany's 16 states, said she is in favor of introducing tuition fees.

German official in favor of fees

"I'm for university fees, but I must add, that whoever introduces them, must also make sure there's a reasonable access to scholarships. And compared to other countries, we are way behind in that regard," she told Deutsche Welle radio.

The OECD warned that European governments, such as Germany's should carefully consider the balance between state funding and university fees, noting that per-student expenditure at the university level in many European countries is less than half of the amount spent in the United States.

However for all its budgetary woes, Germany still remains one of the top three university destinations for foreign students within the OECD after the US, which takes in 20 percent of foreign students and the UK, which takes in 11.3 percent. Nearly nine percent of foreigners choose to pursue their studies in Germany.

Source: dw-world.de/dw/article/0,2144,3633837,00.html