FiBS

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Germanys Model on Financing Lifelong Learning
the 3 Pillar Model
CEDEFOP-Workshop Dr. Dieter Dohmen Thessaloniki,
January 31, 2008
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Content

• The Basis for Reform a few selected figures
• Financing LLL in Germany today
• The 3 Pillar-Model
• Summary

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1. Ausgangslage Partizipation
Participation in non-formal vocational further
training by age in selected OECD-countries, 2003
Source OECD (2005), Education at a Glance
OECD-Indicators, p. 367.
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1. Ausgangslage Umfang
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1. Ausgangslage Finanzierungsbedarf
Financing needs for direct costs and fees
Source BIBB-data, FiBS calculations
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1. Ausgangslage Willingness to pay
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1. Ausgangslage Zusammenfassung
Participation rates in professional training in
Germany are low and correlates clearly with
prior education levels, as does average
amount. Participation rates drastically decrease
above the age of 50 or 55, SMEs and their
employees participate below average (though
knowledge intense SMEs participate
strongly). Willingness to pay is rather
modest. Recent developments in training for the
unemployed supported such trends and overstrain
lowly qualified people
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2. The basis
Festlegung des Koalitionsvertrags An der
Finanzierung von Weiterbildung müssen sich die
Allgemeinheit, die Wirtschaft und der Einzelne in
angemessener Weise beteiligen. Durch
Bildungssparen wollen wir ein neues
Finanzierungsinstrument entwickeln und dazu das
Vermögensbildungsgesetz novellieren. Dies
geschieht haushaltsneutral.
Coalition agreement The general public, the
economy and the individual need to contribute to
the financing of further training. We intend to
develop a new financing instrument by amending
the law of asset formation through saving for
training. This takes place budget neutral.
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3. Overview
Tax regulations
Law of asset formation
Training loans
Training bonus
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3a. Training bonus
Bonus 50 of the training fees, max.
154 (lower boundary 30) Target Mobilisation
of low-income groups To co-finance those, who
are not supported through income tax system, due
to their low income Target groups People with a
taxable income of less than 17.900/
35.800 Costs up to 60 Mio. p. a. (in fact,
the German government has reserved a total of
45 Mio. for the first three)
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3b. Withdrawal of VermBG-savings
Withdrawal Savings according to the law of asset
formation can be withdrawn without effect on the
savings premium Saving amount increases to
4.000 after 7 years Target group People with low
and middle income (limited to a taxable income of
17.900 / 35.800) Costs Budget neutral
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3c. Training loans
Loans Low-interest loans should be provided
through a public bank, e.g. the KfW (formerly,
Kreditanstalt für Wiederaufbau) Take-up possible
without credit assessment Costs of maintenance
can be financed through the loan in addition to
direct costs Costs Proposal is budget neutral,
as long as the government does not provide
deficiency guarantees
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3d. Concluding remarks
The model amends the present system and can be
considered a first improvement with regard to
supporting professional training It is directed
at those interested in professional training and
will to contribute own means, but who dont have
sufficient funds on their own (current income or
assets) However, it does not reach several
important target groups lowly qualified,
unemployed and SMEs ? Further action is required
be at state or federal level
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Germanys Model on Financing Lifelong Learning
the 3 Pillar Model
CEDEFOP-Workshop Dr. Dieter Dohmen Thessaloniki,
January 31, 2008
D.Dohmen_at_fibs.eu