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EACEA National Policies Platform:Eurydice
Early childhood and school education funding


3.Funding in education

3.1Early childhood and school education funding

Last update: 26 March 2024


Early childhood education and care

Publicly-maintained day-care centres for children (maintained by the local authorities) are financed by the local authority (Kommune), by the Land (subsidies to cover personnel and material costs etc.) and through parental contributions. Meanwhile, day-care centres that are privately maintained (by churches, parents' initiatives etc.) are also financed by the local authority (Kommune), by the Land and through parental contributions, and, in addition, by the maintaining body's own resources. Financing by the Länder may include subsidies to cover investment, personnel and material costs etc.

In 2022, according to the financing statistics, the public sector expended Euro 40.5 billion on early childhood education and care. The Länder share amounted to Euro 20.0 billion or 49.3 per cent of expenditure on the primary sector and the local authority share to Euro 20.5 billion or 50.7 per cent of expenditure.

This was 4.9 percent more than in the previous year. The increase in expenditure is closely linked to the expansion of childcare places children until they enter school. The Federation, the Länder and the local authorities agreed in 2007 to progressively establish quality and needs-oriented day-care services for children under three years of age in day-care centres and child-minding services until 2013. The Children Promotion Act (Kinderförderungsgesetz – KiföG) from 2008 regulates, amongst other things, the financial aid provided by the Federation to expand day care for children by setting up a “child care expansion” special fund. Since 1 August 2013 all children from the age of one have had a legal right to early-childhood education in a day-care centre or child-minding service.

Since 2008, the Federal Government has contributed to the expansion of child day care with a total of five investment programmes. Within the framework of these programmes, the Länder and local authorities must bear a share of the investment costs themselves. The funds of the fourth and fifth investment programmes are to be used to create a further 190,000 places for children up to the age of school entry. With the fifth investment programme, which is partly financed by funds from the European Union's NextGenerationEU recovery plan, the Federal Government is providing an additional Euro one billion. The basis for the fifth programme is the economic stimulus package to deal with the consequences of the COVID 19 pandemic in 2020 and 2021. The money will make possible 90,000 new childcare places in day-care centres and in child day care. The funds can also be used for conversion measures and for investments in new hygiene and room concepts.

Within the framework of the investment programmes, the Länder and municipalities must bear a share of the investment costs themselves. Partly due to this co-financing share, the investment expenditures of Länder and municipalities for child day care have also increased since the investment programmes came into existence. The expansion of childcare capacities requires additional staff and material resources. The Länder or local authorities contribute to the additional operating costs directly (public day-care facilities) or in the form of subsidies (privately run day-care facilities).

With the Act on the Further Development of the Quality and Participation in Child Day Care (Gesetz zur Weiterentwicklung der Qualität und zur Teilhabe in der Kindertagesbetreuung), the Federation supported the Länder from 2019 until 2022 with a total of around Euro 5.5 billion for measures to further develop the quality of childcare and to relieve parents of the fees. With the Second Act on the Further Development of Quality and Participation in Child Daycare (Zweites Gesetz zur Weiterentwicklung der Qualität und zur Teilhabe in der Kindertagesbetreuung – R64), the so-called KiTa Quality Act, the Federation is providing the Länder with a total of around Euro 4 billion in additional funding for 2023 and 2024.

Primary and secondary education

Financing of school education

The public-sector school system is financed on the basis of a division of responsibilities between the Länder and the Kommunen (local authorities). While the latter bear the costs of non-teaching staff and the material costs, the Ministries of Education and Cultural Affairs of the Länder are responsible for the teaching staff payroll. Attendance of public-sector schools is free of charge.

In order to balance out school costs between the local authorities and the Länder, for certain expenses (e.g. for transporting pupils to and from school) the local authorities receive reimbursements or lump-sum allocations from the Land budget (generally by the Ministry of Education and Cultural Affairs or by the Ministry of Finance). The Land also supports the local authorities through one-off grants, for example, contributions to school construction costs or certain subsidies for running costs.

Where schools have catchment areas extending beyond the local area, e.g. certain sonderpädagogische Bildungseinrichtungen (special schools) and Fachschulen, the Land can be the Schulträger (maintaining body) and therefore also responsible for funding the material costs and the non-teaching staff payroll.

In 2022, according to the financing statistics, the public sector expended Euro 87.5 billion on general and vocational schools. The Länder share amounted to Euro 68.2 billion or 78 per cent of expenditure, and the local authority share to Euro 17.2 billion or 19.6 per cent of expenditure. Federal expenditure amounted to Euro 2.1 billion or 2.4 per cent.

In March 2019, after the Bundestag, the Bundesrat also approved an amendment to Article 104c of the Basic Law. Parallel to the legislative procedure, the Federation and the Länder have agreed on a corresponding administrative agreement. With the constitutional amendment, the Federation can grant the Länder financial assistance to increase the efficiency of the municipal education infrastructure, which, like the digitisation of the education system, is of particular importance for the state as a whole.

The amendment of Article 104c of the Basic Law was a prerequisite for the DigitalPact School 2019-2024 (DigitalPakt Schule 2019–2024), with which the Federal Government and the Länder are pursuing, among other things, the goal of creating digital education infrastructures suitable for the future. The Federation promotes digital technology, while the Länder are responsible for content development. Euro 5 billion from the Federation and a further Euro 500 million from the Länder will be invested in the digital infrastructure of schools. In addition, the Länder will ensure the further training of teachers, the adaptation of educational plans and the further development of teaching.

In the exceptional situation caused by the COVID 19 pandemic, the Federation and the Länder have concluded supplementary agreements to the existing funding guidelines. The Länder will receive additional support in the form of an "immediate equipment program" for terminal equipment in schools, an agreement to promote the administration of IT in schools, and the programme for loaning equipment to teachers. The Federation is providing Euro 500 million for each of these programmes, while the Länder are contributing at least ten percent. In addition, the Länder are stepping up their efforts to train teachers in digital teaching and learning scenarios (e.g., technology, didactics, media skills).

In addition, the DigitalPakt Schule will create a new foundation for the digital infrastructure in the Länder. Euro 250 million will be invested in cross-Länder projects (länderübergreifende Vorhaben – LüV) that deal with the interoperability of the different learning platforms, the provision of learning materials, the cooperation of teachers and the adaptive individual practice of pupils, among other things.

Regular reports on the use and commitment of funds are submitted to the Budget Committee of the Bundestag.

Since February 2023, the DigitalPakt Schule will be scientifically evaluated by an independent third party (evaluator). The evaluator is to submit an interim report by the end of 2024 and a final report by the end of 2026. The aim of the evaluation is to determine what changes the DigitalPakt Schule has led or contributed to in the area of digital infrastructure and the use of digital media in schools. The results of the evaluation will be published.

Financing of vocational training

The duales System (dual system) of vocational training operates at two locations, namely within companies and at the Berufsschule (vocational school). Vocational training outside the school sector is mainly financed by companies, whose net costs are estimated at about Euro 8.4 billion in the training year 2017/2018 (latest survey). It is hard to put a figure on public spending on education and training in the dual system. For 2021, almost Euro 9.2 billion have been budgeted for vocational schools in the public budgets. An estimated Euro 3.4 billion of the budgeted funds for 2021 will be allocated to part-time vocational schools. The remaining Euro 5.8 billion will be used to finance other types of school in the vocational education system, such as full-time Berufsfachschulen, Fachgymnasien, Fachoberschulen, the Berufsvorbereitungsjahr, the Berufsgrundbildungsjahr and the Fachschulen.

Financial Autonomy and Control

Early childhood education and care

Under the statutory provisions the maintaining bodies for day-care centres for children are free to administer their own funding.

Primary and secondary education

A process to modernise and further develop the field of public administration is currently underway, which aims to attain a more effective and efficient use of resources. The purpose of this process is, above all, to remove the heavily regulated use of resources by extending the financial autonomy of the schools. The possibility of schools managing their own budgetary funds has increased in recent years on the basis of amendments to the school legislation. In the majority of Länder, schools are already able to determine their own use of resources for one or several types of expenses (e.g. learning and teaching aids) within the budget allocated by the maintaining body. Initial approaches are also in place for the autonomous use of the personnel resources allocated.

Fees within Public Education

Early childhood education and care

Early childhood education and care is not a part of the state school system, and attendance of day-care centres is not, as a general rule, free of charge. To cover some of the costs, parental contributions are levied, the level of which may vary from Land to Land as well as from local authority to local authority and can depend on parents' financial circumstances, the number of children or daily attendance time. The Act on the Further Development of the Quality and Participation in Child Day Care introduced a nationwide obligation to stagger contributions from 1 August 2019.

In recent years, more and more regulations have been introduced to relieve parents of their costs. In some Länder, for example, attendance at a day care centre is already completely or partially free of charge, depending on the child's age and the scope of care. In some Länder no contributions are levied for the final year or the final years in a day-care centre for children.

Primary and secondary education

Attendance of public-sector primary and secondary schools is free of charge, and there are no fees for enrolment or for report cards.

Financial Support for Learners’ families

Early childhood education and care

On application, financial contributions may be waived in part or in full if parents cannot afford to pay them. These would then be assumed by the local youth welfare office. From 1 August 2019, the Act on the Further Development of the Quality and Participation in Child Day Care exempts not only families receiving transfer payments, but also families with a low income from childcare contributions, for example if they receive a child supplement or housing benefit. The Länder can also use these funds for additional Länder-specific measures to relieve families of the fees.

Primary and secondary education

In the basic social security for persons seeking employment under Book Two of the Social Code (Zweites Buch Sozialgesetzbuch - Grundsicherung für Arbeitsuchende) and welfare benefits under Book Twelve of the Social Code (Zwölftes Buch Sozialgesetzbuch - Sozialhilfe), in accordance with the Asylbewerberleistungsgesetz (German social welfare law for asylum seekers) and with the Bundeskindergeldgesetz (Federal Child Benefit Act) (for families who receive a supplementary child allowance or housing allowance), children, youths and young adults in need are legally entitled to education and participation benefits (so-called education package).

The law takes into account the following needs for pupils who are eligible for the benefit:

  • Expenses for the lunch together in schools as well as in principle also in day care facilities and in childminding services,
  • suitable learning support that supplements the schooling, whereby the respective school law provisions are to be taken into account in each individual case;
  • a total of Euro 174 for the 2023 calendar year in two instalments for personal school needs such as a satchel, writing, calculation and drawing materials; as well as digital learning materials;
  • expenses for school trips lasting one or several days (including class trips within the scope of education regulations), day care facilities for children and child day care;
  • expenses for school transport, unless these are covered or assumed otherwise.

Until they reach the age of 18, children/young people entitled to benefits also receive a lump sum of 15 Euro per month provided that expenses for participation in social and cultural life in the community can be proven (e.g. for membership fees in sports clubs or music school fees). The participation budget can be saved to a limited extent. The implementation of the education package is the responsibility of the respective local authorities and districts. 

Financial support for families of pupils with special educational needs

No information is available on financial support measures for families of pupils with special educational needs. Families of children with (impending) disabilities can be supported within the framework of integration assistance under Book Eight of the Social Code (Achtes Buch Sozialgesetzbuch – SGB VIII) or within the framework of benefits for the rehabilitation and participation of people with disabilities under Book Nine of the Social Code (Neuntes Buch Sozialgesetzbuch – SGB IX).

Financial Support for Learners

Financial support for pupils

In general, there are no provisions for financial assistance to secondary school pupils from grades 5 to 9. Some Länder have regulations allowing for the provision of financial assistance to pupils up to grade 9 who must be accommodated outside of their home.

On the basis of legal regulations on the part of the Federation (Federal Training Assistance Act – Bundesausbildungsförderungsgesetz), pupils from grade 10 onwards at general and vocational secondary schools are entitled under certain conditions to financial support from the state in the form of a grant, if they have no other means (mainly from their parents' income) of maintenance and financing training. For certain types of school, financial support for pupils is dependent e.g. on pupils being accommodated outside the parental home if the place of training is not accessible from there. Training assistance is paid to cover living costs and training, with the income and financial means of the pupil as well as the income of his or her parents and, if applicable, his or her spouse or partner also being taken into account. Since 21 July 2022, students can – depending on whether or not they live with their parents and what type of training institution they attend – receive financial assistance of between Euro 262 and Euro 736 monthly under the terms of the Federal Training Assistance Act. To the extent that costs for health and long-term care insurance are actually incurred by recipients, as a rule a health and long-term care insurance supplement may also be granted under the BAföG, generally in the amount of up to Euro 122, in individual cases in the amount of up to Euro 206. In addition, a childcare allowance of Euro 160 may be claimed for each child. The assistance provided by the state does not have to be repaid.

In 2022, 141,000 pupils received training assistance under the Federal Training Assistance Act. Federation expenditure on financial support for pupils under the Federal Training Assistance Act amounted to over Euro 521 million. Pupils granted support each received an average Euro 517 monthly.

Besides federal training assistance, pupils are entitled under certain circumstances to basic social security benefits for job seekers under Book Two of the Social Code (Zweites Buch Sozialgesetzbuch IIGrundsicherung für Arbeitsuchende). Some Länder have provisions under which upper secondary pupils who have no claim to assistance under the Federal Training Assistance Act can receive financial assistance from the Land under certain conditions.

During the final 24 months of their education and training, pupils can make use of the federal government’s Educational Credit Programme (Bildungskreditprogramm).

Teaching aids

So that pupils have access to all teaching aids used in lessons regardless of their economic and social circumstances, most Länder have regulations on the provision of financial assistance for pupils to purchase teaching aids (Lernmittelhilfe), or on their provision free of charge (Lernmittelfreiheit); this provision is, in part, staggered according to parents' income and number of children. Under these regulations, pupils are either exempt from the costs of teaching aids or only have to pay part of the costs. The funds are provided either by the Schulträger (the local authority responsible for establishing and maintaining the schools), or by the Land in question. As a rule, pupils at public-sector schools are lent textbooks and other expensive teaching aids for the time they require them. A fee is charged in some cases for the loan or the parents may be required to pay a portion of the costs (in some Länder, this applies, for example, to digital devices). Parents and pupils are expected to provide their own expendable materials (exercise books, pens and pencils) and other items (e.g. drawing instruments, material for use in crafts and needlework/metalwork lessons).

The provision of digital, mobile terminals as loan devices has not yet been regulated in all Education Acts of the Länder. In addition to the procurement, the operation (maintenance, updates, IT security) as well as the data protection-compliant integration of the end devices into the school infrastructure is also the task of the school authorities, which in turn must contractually bind the IT service providers required for this. In some Länder Bring Your Own Device (BYOD) applies. Students make their mobile devices available for use in class. Each Land decides differently on whether pupils at privately-maintained schools are to be supplied with teaching aids free of charge. In analogy to the devices lent to pupils, corresponding regulations for the use of devices lent to teachers as teaching aids are to be agreed with the school authorities (operators of the school infrastructure). In addition, there is the possibility to apply for terminal equipment for pupils according to the recognition of an additional need for persons entitled to benefits pursuant to Book Two of the Social Code (Zweites Buch Sozialgesetzbuch Grundsicherung für Arbeitsuchende –SGB II – R166). During the school closures related to the COVID-19 pandemic, an additional requirement of up to Euro 350 was recognised for pupils in need of assistance under certain conditions in order to purchase a digital device, including the associated hardware and software, for home learning needs.

Transport to and from school

Each of the Länder has arrangements as regards the transport of pupils to and from school. There are certain differences as to who is entitled to use school transport and the scope of services provided. In all cases, however, there are comprehensive provisions for the period of compulsory full-time schooling to which the following statements refer. In general, fares are reimbursed, usually for public transport, while under certain conditions a school transport service is established in its own right. The purpose is to guarantee fair opportunities for pupils from all walks of life, between urban and rural areas, schoolchildren with and without handicaps.

It is generally the responsibility of the districts and municipalities to ensure adequate provision for transporting pupils to and from the school they attend. School transport is usually funded by the maintaining bodies or the rural or urban districts (i.e. usually the local authority). In most cases subsidies are granted by the Land in question.

School transport services must be reasonable in terms of costs for the authority which supplies the funding and offer acceptable standards to the pupils who use them. Only such pupils who live a certain distance away from their school have a right to use transport to school. There are slight differences on this between the various Länder. Two kilometres is the general minimum distance for which transport is provided for primary school pupils, whilst from grade 5 onwards pupils living up to three or four kilometres away from school are expected to make their own way there and back. Exceptions can be made for shorter distances than these if the roads are particularly dangerous, and for handicapped pupils. Public transport is usually the cheapest solution. Where no public transport is available the local authorities provide school buses. In cases where this alternative does not make economic sense or is unreasonable for handicapped pupils, a subsidised private car or handicapped taxi service often provides the best solution. Where a pupil is unable to make his own way to school because of a physical or mental disability or strong sensory impairment, the local authority may also pay the fares of a person to accompany him. The actual form of transport between home and school depends on local conditions and the specific cases involved. Some Länder have enacted very detailed regulations, while others leave it up to the districts and municipalities to make their own arrangements for the implementation of general guidelines.

The authorities are not obliged to provide transport for pupils to any school, regardless of distance. A right to school transport as such exists only to the nearest school, though the term is defined differently from one Land to the next. A partial refund of travelling costs may often be granted in cases where parents decide to send their children to a school other than that which is nearest to their home.

The assumption of travelling costs by the authorities does not mean that school transport is entirely free of charge in all Länder. In some Länder, the transport costs are assumed in full if the parental income is so low that they are considered to be living in poverty. In other Länder, parents still have to make a contribution despite being on a low income. However, in this case, the amount of the contribution depends on the parental income.

Accident insurance for pupils

In the Federal Republic of Germany accident insurance does exist for all pupils and students during lessons, on the way from home to school and back and during school functions. School functions also include any programmes immediately preceding or following timetabled lessons where the school is required to provide supervision. These also include meals provided by the school, school walking excursions, study trips within and outside Germany as well as school trips. Statutory accident insurance is normally in the hands of the local authority accident insurance association.

Private and Grant-Aided Education

Early childhood education and care

Maintaining bodies for child and youth welfare services from the private sector receive financial support from the Land and from the local authorities (Kommunen) to run day-care centres for children(e.g. for operating costs and investments).

Primary and secondary education

The maintaining bodies of privately-maintained schools receive some financial support from the Länder, in various forms. The reference value is the situation pertaining to costs in the public-sector schools. All of the Länder guarantee standard financial support to schools entitled to such assistance; this includes contributions to the standard staff and material costs. The Länder either grant a lump-sum contribution, calculated on the basis of specific statistical data and varying according to school types, or the individual school may have to set out its financial requirements and receive a percentage share in subsidies. As well as school fees and standard financial support, there are other forms of financial assistance, which may be paid together with that support, such as contributions to construction costs, contributions to help provide teaching aids to pupils free of charge, contributions to old-age pension provision for teachers, and granting sabbatical leave to permanent teachers with civil servant status while continuing to pay salaries. Parents and guardians may have school fees and transport costs reimbursed. The funds are mostly provided by the Länder, but a small proportion is provided by the local authorities. A huge number of Ersatzschulen (alternative schools) are maintained by the Catholic or Protestant churches, which fund their schools from their own means to the extent that sometimes little or no fees must be charged. The share of public funding in the overall financing of privately-maintained schools varies between the Länder, and also depends on the type of school (there are also numerous special provisions, for example for approved privately-maintained schools in contrast to recognised privately-maintained schools, for boarding schools and for church-run alternative schools).