Germany’s international students are proving to be more than just a cultural asset—they are also an economic powerhouse. A recent study by the German Economic Institute IW, commissioned by the German Academic Exchange Service DAAD, has revealed that international students contribute billions of euros to the country’s economy. In fact, each graduating class of international students ultimately generates eight times more revenue for Germany’s public finances than the state initially invests in them. The study found that the approximately 80,000 international students who completed their degrees in 2022 are expected to pay a staggering 15.5 billion euros more in taxes and social contributions over their lifetimes than they receive in government benefits. This financial advantage stems largely from the fact that many international graduates choose to stay in Germany. According to the report, 45 percent of international students who arrived in 2010 were still living in Germany a decade later, making the country one of the world’s leaders in student retention alongside Canada. Even if that retention rate were to drop to 30 percent, the long-term financial gains would still exceed 7.4 billion euros.
Beyond the economic benefits, Germany is increasingly relying on international students to fill labor shortages, particularly in fields like engineering, IT, and healthcare. And the number of foreign students is rising. In 2024, university enrollments in Germany increased by two percent, reaching 491,000 new students. What’s driving this growth? International students, whose numbers jumped by 10 percent, now make up nearly one-third of all first-year students in Germany. Given these figures, the DAAD is urging the government to take further steps to attract and retain international students, including offering more scholarships, strengthening university-industry collaborations, and creating a more welcoming environment for students from abroad. If Germany could increase its retention rate to 50 percent, the DAAD estimates the economic benefits could soar to 26 billion euros.