In Britain, the universities revolution goes on. The higher education bill going through parliament could allow universities to charge higher fees, another step in marketising the academic world.

With growing frustration, some critics point to Germany. How can it be, they ask, that British fees have risen to become the highest in Europe while Germany is able to provide university education for free? If a similarly wealthy country with a conservative-led government is able to do it, why can’t we?

Germany, however, is not free of angst over its own higher education system. The story of how and why it scrapped tuition fees after a brief and unsuccessful flirtation with the idea is not as straightforward as it seems, nor has it reached its final chapter. Its failure is very much one of a triumph of federalism.

In 2005 Germany’s constitutional court scrapped a ban on tuition fees introduced by Gerhard Schröder’s coalition government of Social Democrats and Greens, arguing that it curtailed the powers of regional governments. Soon afterwards seven universities took the leap and charged €1,000 a year, expecting that this would create a dynamic internal market: fee-paying universities would soar and other universities would be forced to follow suit. But student opposition was fierce: in Hesse young people occupied universities carrying banners reading “Without education, I’ll have to go into politics”, and in Hamburg some undergraduates boycotted the fees.

The protests provided a springboard for the Social Democratic and Green parties, which began to scrap tuition fees in states where they came into power. “We found that fees interfered with the principle of equal opportunities to a degree that was unacceptable to us,” said Stefan Körner, the Green leader in Lower Saxony, which ditched fees eight years after their introduction. By 2013 even Bavaria’s arch-conservative Christian Social Union party had made a U-turn on fees, criticising universities for hoarding money rather than investing it in research or student support: “It cannot be that we charge and don’t know what it is being spent for,” party leader Horst Seehofer said at the time.

The idea that higher education in Germany is free is only half true. Students still have to pay an administration fee of €150-€250 a term, for which they get access to canteens and sports facilities, union membership and a student travel card. While there are no tuition fees for bachelor degrees at state universities, some states will charge students for so-called “non-consecutive” masters degrees, i.e. courses that don’t build on the subject they have studied as undergraduates. Those who drag their feet and take too many semesters to complete their courses also have to start coughing up in most of the Länder. All of Germany’s 109 private universities charge tuition fees. As a result, the amount of money Germany’s higher education sector earns from private sources now is still higher than it used to be 10 years ago, before fees were introduced and then scrapped – €2.8bn compared with €2.2bn in 2005.

If some regional governments calculated that they could afford to compensate for the loss of income through tuition fees, it has partly to do with the fact that thanks to a strong tradition of vocational courses and apprenticeships, the percentage of young people who opt to go to university is smaller in Germany than in the UK, about 27% compared to 48%. German universities are also not traditionally expected to provide the kind of services to students that are common in Britain or the US. Only about 10% of students live in university-provided accommodation.

Many students who have switched from the British to the German system have found it challenging the supposed dichotomy between Anglo-American laissez-faire and German regulation. “At first, I found be quite bewildering to what an extent students here are expected to organise their own studies,” said Andrew Tompkins, an American historian who moved to Berlin’s Humboldt University after doing his postgraduate at Oxford University.

“German universities provide a less structured experience: the onus of learning is often on the student, not the institution. But now the amount of hand-holding you get at American universities strikes me as more odd”.

For the moment, the issue of tuition fees is off the political agenda in Germany. The hands of the idea’s supporters in central government, such as Chancellor Angela Merkel’s education minister, Johanna Wanka, are tied without the support of the states.

There are persistent concerns that Germany fails to attract the best international undergraduates in the way that Britain, Switzerland or even Austria do, and struggles to hold on to the talents it produces. It seems telling that the last two German winners of a Nobel prize were either based at American universities or working on collaborative projects with US researchers.

Germany’s highest-ranked university in this year’s Times Higher Education’s world rankings is Munich’s Ludwig Maximilian university at number 29 – even if, as Nick Hillman argues in a recent report for the Higher Education Policy Institute, non-teaching research institutes such as those of the Max Planck society could top Cambridge and Oxford were they to be included.

Some insist that Germany has not seen the last of tuition fees. “Behind closed doors, many education ministers around the country will admit that phasing out tuition fees was a wrong move,” said Dieter Dohmen, director of Germany’s Institute for Education and Socio-Economic Research. With student numbers rising and regional governments failing to increase spending, “universities are groaning under the weight of the costs”, he said.

Merkel’s government is determined to push through a “debt brake” by 2020, stopping the states from racking up any more structural deficits.

“If the government goes through with its plans, then we have a big debate about tuition fees around the corner,” said Dohmen. “My prediction is that we will have reintroduced tuition fees by 2020.”