The Political Economy of Higher Education Finance by Julian L. Garritzmann

Author:Julian L. Garritzmann
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

3.8.5 Kohl Drastically Retrenches BAföG

In September 1982 the social-liberal coalition fell apart due to fundamental disagreements over economic and social policies. CDU/CSU opposition leader Helmut Kohl started negotiations with the FDP and used a motion of no confidence (konstruktives Misstrauensvotum) to vote Chancellor Schmidt (SPD) out of office and to form a new CDU/CSU–FDP Government. The consequences of this shift for higher education, particularly the tuition-subsidy system, were enormous. In a nutshell, Kohl’s Government essentially undid all progressive reforms of the social-liberal coalition and returned to a status similar to the pre-BAföG period, i.e., a low-tuition–low-subsidy model.

As part of its first budgetary law (Haushaltsbegleitgesetz 1982), Kohl’s Government retrenched BAföG in every respect. Firstly, financial support was entirely abolished for the vast majority of pupils in schools and vocational training (Böttcher et al. 1988: 9). Secondly, the proportion of higher education students benefitting from BAföG was decreased significantly. Figure 3.5 depicts the constantly decreasing proportion of beneficiaries throughout the 1980s and 1990s (with a short jump after Reunification). Before the change in government, 35% of all students had received BAföG; this dropped to 20% in 1987, i.e., 4 years after Kohl took office. Thirdly, the amounts granted were also decreased significantly. Finally, Kohl’s bill changed the status of BAföG from a grant focus to being purely on a loan basis: all students had to repay the entire sums received, beginning 5 years after graduation (Böttcher et al. 1988: 45). Overall, within 6 years of conservative rule, spending decreased from 3.7 billion DM in 1981 to 2.3 billion DM in 1987 (Schweisfurth 1993: 377). A subsequent report by the BMBW concluded that “No other policy field has been used to cut public spending for consolidating the public household as much as this one” (cited in Schweisfurth 1993: 378, Author’s translation).

The conservative-liberal Government justified these cuts mainly on economic grounds, arguing that the economic situation made cuts necessary (Böttcher et al. 1988: 51). At the same time, however, the Government continued to increase indirect subsidies, such as tax deductions for parents paying for their child(ren)’s education (Ausbildungsfreibeträge)—just as they had done during the 1970s utilizing their Bundesrat majority. Consequently, spending on these indirect subsidies soon equaled the savings made by the BAföG cuts (Böttcher et al. 1988: 53; Schweisfurth 1985: 5). While spending on BAföG decreased by 21% between 1977 and 1990, spending on indirect subsidies simultaneously increased by 290% (Schweisfurth 1993: 413). Thus, the CDU/CSU–FDP Government’s actions belied their austerity-related justification as cheap talk.

It seems more logical to assume that the Kohl Government’s “real motives” for the cuts in BAföG and extension of Freibeträge were distributional: while BAföG mainly benefitted lower- and middle-income families and widened access for formerly under-represented groups, higher strata benefitted less or not at all. In contrast, higher-income groups benefitted much more from indirect subsidies, whereas families with lower incomes hardly profited. Kohl’s cut-backs in 1982/1983 and during the subsequent 16 years of his administration therefore had clear distributional (i.e., financially regressive) consequences. In line with my model (Chap.

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