Harvards on the Rhine

Martin Göring, a young German ready for college, had a choice to make: Should he attend a public college or a private business school?

After sitting in oversized classes held in crumbling state-owned buildings, he made up his mind. "I sat down among 400 students, 300 of which didn't listen," says Mr. Göring.

So three years ago, he walked out of the free state-run university system, and applied to one of the country's few private colleges.

Today the 22-year-old student says putting down $5,000 annually in tuition at the Otto Beisheim School of Management in Vallendar paid off big-time. He's getting things that no public university could have offered: individual attention and a well-connected alumni network likely to lead him to a job.

"I see this as an investment in my future," Göring says.

A budding revolution is shaking Germans' egalitarian mentality. Education is no longer seen as a privilege granted free to all but rather as a commodity worth investing in.

During the past decade, the number of students choosing private education over an underfunded and overregulated public system has sharply increased. Although scarce 10 years ago, private colleges - modeled after US schools and sometimes relying on English as the language of instruction - has tripled to 51.

Last month, Chancellor Gerhard Schröder said the government would invest $250 million in five "elite" universities in the next five years to help German universities compete globally.

Today such schools still educate only 30,000 out of 2 million students, but by helping break national taboos - such as asking students to pay for their college degrees - they've acted as a catalysts for change. And now, from Göttingen to Munich to Hamburg, universities are experimenting with selecting their own students, charging them fees, setting faculty salaries, managing their own budgets, and learning the fine art of fundraising.

For Europeans - accustomed to nominal or nonexistent university fees - the idea of paying for a college education is jarring.

In Britain, the government was almost brought down last month by Prime Minister Tony Blair's insistence on asking some university students to contribute as much as $5,000 to their annual college costs. In France, hundreds of thousand of students recently took to the streets when the government made a proposal similar to Schröder's. This past winter, German students also organized massive protests against the idea of tuition fees.

But there are also those in Germany who argue that free education for all high school graduates has come at the cost of stifling government regulations and a lack of healthy competition among students and schools.

Today, however, Germany stands at a "crossroad of change," with people accepting new ways of thinking, says Peter Gaehtgens, head of the Bonn-based Association of German Universities and Other Institutions of Higher Education.

"By having the freedom to act like a private industry, to hire and fire their professors and select their students according to their own criteria," Mr. Gaehtgens says, "private institutions could be a stimulus for change."

That a growing number of students like Göring choose a private college "shows there's a need for a different type of education and a population ready to pay for quality," says Gaehtgens.

German universities have never charged even a nominal fee for tuition and Chancellor Schröder is on the record speaking out against tuition fees. But most experts say the system is bound to change.

In fact, six states, including Bavaria, have challenged in Germany's highest court the government's refusal to let public institutions levy fees. As soon as the court gives them the go-ahead, many states have said they plan to initiate fees.

In the meantime, five states have already begun charging "perennial" students. Germany has more long-term students than other countries. Thirty percent of students interrupt their studies without a degree. Widespread failure to finish college promptly, say some educators, is due to a lack of motivation, poor conditions, and the fact that school is free.

But the very concept of free college is now being reexamined by some Germans. "Why should a taxi driver's taxes finance the cost of higher education?" asks Florian Kreuzer, a student at Witten/Herdecke University, Germany's oldest private college. "It's not a social system."

The issue, however, remains deeply divisive. In Frankfurt am Main, 1-1/2 hours away from the exclusive School of Management, posters saying "education isn't for sale" are plastered throughout the public Göthe University's often shabby corridors.

"The university has to remain free," says Marc Bohse, a business administration student there. "It's all about equality of chances."

"If you have 'elite' schools, does that mean that we are 'only' a university?" asks Göthe University student Hülya Güder.

And yet for some, Güder's story exemplifies the failure of the free university system.

The 28-year-old Frankfurt woman has been a student since 1995. Granted, she worked part time. But she admits she wasted several years because nobody counseled her.

First she tried a major in chemistry. Then she switched to history but she found out she needed Latin, which she'd never had. Counseling? There was none. Lines at professors' offices were always long and the professors unreachable. "What people really need," says Güder, "is to find out how to complete their studies as quickly as possible. [They need] somebody that somehow cares."

Against this backdrop, private schools have been introducing new, more service- oriented models of operation.

"Colleges are going to have to treat their students as customers," says Meyer Guckel of of the Foundation for the Promotion of Scientific Research in Essen, which supports research and education with private money. "Today, it's the other way round. Public institutions are happy for every student they don't get."

The state of Bavaria recently gave Munich's Technical University the go-ahead to experiment with seeking its own students who excel in its strongest disciplines and then charging students for those courses.

Wolfgang Herrmann, the dean of Munich Technical University, prides himself in having built an "entrepreneurial" institution. A sign of success: The university has raised $85 million in sponsorship money over the past five years and built up a reputation.

But despite the recent boom in private higher education experts say it's unlikely that German Harvards and Stanfords will ever replace German public universities.

The tradition is simply not strong enough. Interest in the private sector, they predict, will plateau as the public university system reforms itself.

"When public universities [offer] the privileges that the private schools now enjoy, competition will take away the private schools' advantages," says Guckel.