The City of Hamburg plans to do away with tuition fees as of the 2012 winter semester. This would leave Germany with just two of its 16 federal states generally charging fees in public-funded higher education.
The Hanseatic City State of Hamburg has been ruled by a Social Democrat government since March this year.
With North Rhine-Westphalia no longer charging fees this winter semester and Baden-Württemberg's new Green-Social Democrat government set to phase out fees, Hamburg's new policy would make Bavaria and Lower Saxony the last German states still retaining fees for all students.
Some of the states without general fees do charge students doing a second degree or taking excessively long to graduate. And in fee-charging states, exemptions have always been made in special cases, such as students with a family or those achieving especially well.
Under a former Christian Democrat government, students in Hamburg were charged a EUR500 (US$684) tuition fee ahead of each semester. Last year, the Christian Democrats were forced to enter a coalition with the Greens to stay in power, and regulations were eased.
The level of the fees was lowered to EUR375 and payment was only due after graduating, and only if graduates were earning a pre-tax annual salary in excess of EUR30,000 (US$41,000).
The loss of income for Hamburg's eight public-funded institutions, including the University of Hamburg, Germany's fourth largest institution, would amount to around EUR39 million.
According to Higher Education Minister Dr Dorothee Stapelfeldt, this funding gap will be closed via the city state government's overall budget, with EUR37.8 million being allocated directly to universities and EUR1.2 million going to the student welfare service.
However, given the government's self-imposed budget growth restrictions, just how it will raise this money remains unclear.
The new government also wants to wind up the Wissenschaftsstiftung, a foundation set up under the Christian Democrats in 2009 to promote excellence in research at higher education institutions. The ruling Social Democrats claim the foundation lacks transparency. The EUR11 million provided to research by the foundation each year is to be raised via the government's budget, said Stapelfeldt.
Earlier this year the Guardian reported that German universities feared the decision to scrap fees would leave them facing "dramatic shortfalls in funding". It quoted Hamburg University Vice-president Dr Holger Fischer as saying it was "a catastrophe for the university".
GERMANY: Baden-Württemberg set to scrap fees
GERMANY: University funding fears as states scrap fees
GERMANY: Another state joins dash to scrap fees
Receive UWN's free weekly e-newsletters