The higher education sector has to face competition much in the same way as other economic entities do. Much has been done to introduce reforms making use of economic terms and concepts. This paper will highlight the manner in which different models for financing higher education can contribute to the management of higher education.

The general higher education framework in Germany -- which differs from that in other countries -- has to be taken into account. Amongst these differences are notably:

-- the absence of fees as an instrument for the financing and management of higher education;

-- the fact that only a restricted number of students are selected by institutions of higher education. Where student numbers for subjects in great demand are too high, applicants are distributed amongst various universities by a central office.

This paper is divided into four part: (1) an analysis of the German higher education system,: (2) an examination of different management methods relating to a new system of distributing students amongst the different types of institutions (ordinary universities and universities of applied sciences -- Fachhochschulen). A discussion of the management of student distribution within a given university follows. (3) In this context, it is recommended to introduce a market-oriented system of tuition fees instead of making provisions for student admission on the basis of available capacity, curricular standards (CNW) and centralized procedures of the distribution of students; (4) conclusions are drawn from these reforms in order to develop systems for performance analysis (management accounting and control).