Financial Aid Cuts in the United States and Germany: Students Lobby on the World Wide Web


[An earlier version of this article appeared in the Summer, 1996, edition of WORLDSPEAKER magazine.]

In the past two years, college and university students in the western world's two largest federal republics--the United States and Germany--have been faced with potentially the largest student financial aid cutbacks in more than a decade. Not since the early nineteen-eighties, when conservatives won elections in both countries, have national governments mounted such hard-fought efforts to cut expenditures by shifting more of the cost of higher education onto students.

In both countries, students have objected to the proposals and organized traditional as well as high tech opposition efforts. It is instructive from a comparative perspective to review the proposals and the responses from the standpoints of students and governments alike. The German government's effective use of the Internet is particularly noteworthy.

Proposed Loan Subsidy Cuts in the United States

In the U.S., the ascendance of Republicans to majority status in both houses of Congress in 1995 led to proposed cuts in student aid of a size that had not been witnessed since President Ronald Reagan's first budgets. Republicans in the House of Representatives, where measures dealing with the public fisc traditionally originate, were especially dedicated to reducing student loan subsidies.

The budget resolution passed by the House of Representatives in May, 1995, proposed to start charging interest on all student loans from the date of issue, rather than the current practice of six months after a person leaves school, which would cost students approximately $12 billion over the next five years. The budget resolution also threatened a new student loan program, Direct Lending, popular with many students and higher education institutions for it simplified applications and offered a wider choice of repayment options. The only benefits the Republican budget resolution presented students were theoretically lower interest rates on their loans, resulting from a tighter government fiscal policy. The U.S. higher education community, students and institutions alike, were not persuaded and organized the Alliance to Save Student Aid to coordinate public information and lobbying efforts against the cuts.

Despite losing the opening round on the budget to the House Republicans, U.S. students became increasingly involved in legislative minutiae to work against the subsequent legislative measures (reconciliation and appropriations) that would actually put the budgeted cuts into effect, concentrating their efforts especially on moderate Republicans in the Senate. In addition to arranging traditional student demonstrations on Capitol Hill, the United States Student Association and the National Association of Graduate-Professional Students developed strategies using the Internet. Both organizations created sites on the World Wide Web to spread late-breaking information about legislative activities and coordinate the steps necessary for victory. Although the USSA web page introduced itself with a banner proclaiming that universal higher education is a "right", the page was more a pragmatic document than a philosophical one, advising its readers whom to lobby and when.

 A New Student Aid Model in Germany

In Germany, the cutback proposals were not the result of an election, but represented a third attempt by the governing coalition (Christian Democratic Union, Christian Social Union, and Free Democratic Party) to deal with continuing problems in German higher education, where a lack of capacity and output threatens an already lethargic national economy. The first attempt, in 1983, was limited to cutting costs by replacing student grants with loans; the second, in 1989, reversed that action when it became clear that student access among the low-income was declining. The 1995 attempt was more ambitious. It proposed cutting both national and state student subsidies by requiring market-rate interest, about 8.5%, on heretofore interest-free student loans. The proceeds from the interest income, approximately 1.6 billion German Marks over the next three years, would be used for much needed capital construction and program improvements in areas critical to the national economy, especially the sciences.

To offset its effects on financially needy students, part of the the proceeds would be used to increase student aid awards. The proposal would move Germany more toward the U.S. model of higher education finance in which students' payments are an important component. Such higher student charges also fit in conceptually with the desires of a few state minister-presidents and university rectors, especially in the southern states of Bavaria and Baden-Wuerttemburg, to begin charging tuition at their institutions.

Ironically, the decision over two decades ago to make higher education a civil right of qualifying German students has contributed to oversubscription, waiting lists, and a rationing system (Numerus Clausus) that keeps students and their choice of studies more apart than together. Because of widespread dissatisfaction with this outcome, organizing opposition to the government's initiative has not been so simple as rallying interest groups to hold onto what already had been won. In the U.S., opposition party Democrats working against student aid cuts in 1995 did not have to offer superior proposals of their own, but merely block those of the Republicans. In Germany, however, because the status quo is unacceptable to a broad spectrum of political opinion, opposition parties and institutional interests have felt obligated to offer their own higher education funding models. Inevitably, there has been a splitting of the ranks. Student attempts to arrange massive demonstrations against the new funding model, publicized over the Internet by student organizations, have resulted in disappointing turnouts.

The more aggressive use of the Internet has actually come from the German government. The Federal Minister for Education, Research, and Technology, Juergen Ruettgers, created a web page that put forth in facts and figures his coalition government's proposal in its best light and invited critical comment ("Ihre Meinung ist mir wichtig"), which he answered. Student organizations' web pages have, if fact, carried his detailed responses. At each step of the way toward implementation, Ruettgers announced progress or expressed his disappointment when parts of the proposal became threatened. Conversely, student web pages have been long on philosophy, arguing the tradition of tuition-free education and interest-free loans, but short on practical activities to convince legislators and the public that the CDU/CSU/FDP proposal should be defeated. Unlike U.S. student web pages with their detailed strategies listing Senators' names to call and even words to say, German student web pages have advised students to contact Minister Ruettgers about their opposition.

The emphasis of philosophy over pragmatism, as witnessed in German student Internet argumentation, has as much to do with the German parliamentary form of government as it does with any presupposed inclination of Americans to be pragmatic and Europeans to argue from principle. The CDU/CSU/FDP government almost by definition has the votes for its proposal in the lower house, the Bundestag, if the political leadership wants them, unless the governing coalition splits over the issue. It is in the upper house, the Bundesrat, where the proposal is most likely to run aground, controlled at the moment by the Social Democratic Party. In Germany and other parliamentary systems, where parties are formed more around ideologies than they are in the U. S., and where legislators are less free to break from their party, ideological arguments retain their place even as the technology for sophisticated, pragmatic lobbying advances.

The Outlook

The final outcomes of these struggles are still to be determined. In the United States, the Alliance to Save Student Aid was able in 1995, working bill by bill and vote by vote, to defeat nearly all the reductions in student subsidies. The provisions most offensive to students simply were gone by the time key bills reached President Clinton's desk, having been taken out in committee votes, on the floor of the Senate, and in House-Senate conferences. Although the Alliance to Save Student Aid was not successful in defeating legislation that would have limited Direct Loans, the President finished the job by vetoing the bill. House and Senate budget resolutions passed by Republican majorities in May, 1996, still try to limit Direct Lending, but have given up on cutting loan interest subsidies.

Minister Ruettgers' CDU/CSU/FDP proposal is currently in trouble in Germany more because it is a departure from traditional German higher education finance than because of an effectively organized and savvy student opposition. If it has a chance, it will be due to German economic problems that force state minister-presidents to look for new models out of budgetary necessity and will vote accordingly in the Bundesrat, or who will appropriate the ideas from the model and apply them in their own states.

Afterword: September, 1996

By August, 1996, both the U.S. House and Senate Budget Committees had given up on budget reconciliation, a legislative process that could have resulted in cuts in student loan subsidies. It is unlikely that the 104th Congress, which is soon to adjourn, will ask students and their families to bear more of the cost of student loans. Republicans controlling the House Appropriations Committee, however, were continuing their attempt to cut Direct Loan volume by cutting into funds necessary to administer it.

In Germany, a compromise was reached between state and national governments in July, 1996, and passed by the Bundesrat. The compromise is but a shadow of the original restructuring proposal. Beginning with the fall semester, student aid will be reduced for students who change their fields of study or who take too long to complete. Such students will no longer be eligible for the grant component of the aid and will have to pay market interest, which will begin accruing six months after leaving school, on their student loans. Part of the savings from these modest cutbacks will be used to decrease families' expected contribution toward higher education costs. The compromise steers clear of the issue of tuition charges.

During the compromise process, disharmony over the Ruettgers proposal broke into the open not within the governing coalition, but in the SPD, the leading opposition party. Dr. Peter Glotz, longtime Bundestag member and SPD spokesperson who had earlier criticized Ruettgers for his proposal, endorsed tuition coupled with higher student aid. Glotz resigned his position and his seat in the Bundestag after party leader Oskar Lafontaine said the SPD would never support tuition. A hefty debate now ensues at the state level about the question of tuition.

By design, coincidence, or for reasons inherent in the different forms of government, in both the U.S. and Germany the forces with the superior Internet strategy fared the better in the struggle over student financial aid subsidies. That is worth noting.

Selected References

Allgemeiner StudentInnenausschuss der Technische Hochschule Darmstadt. http://www.th-darmstadt.de/fsmathe/asta

Bayer, Michael. http://stud-www.uni-marburg.de/~Bayer

Bundesministerium fuer Bildung, Wissenschaft, Forschung und Technologie. http://wwv.bmbf.de/

Keller, Andreas. http://stud-www.uni-marburg.de/~Bayer/basinmr/studlit.html#14

National Association of Graduate-Professional Students. http://nagps.varesearch.com/

Ullrich, Stephan. http://www.tu-chemnitz.de/~sul/bafoeg/

United States Student Association. http://www.essential.org/ussa/