The annual Wissenschaft Weltoffen report shows an additional 19,000 international students were enrolled last year, meaning the country is already on the verge of reaching its target of 350,000 students by 2020.
In the research, conducted in partnership with the German Centre for Higher Education and Scientific Research (DZHW), DAAD divides international students into two categories: Bildungsinlaender, students who gain higher education entrance qualifications in Germany; and Bildungsauslaender, who obtain entrance qualifications outside of Germany.
Bildungsauslaender increased by 6.6 per cent to 251,542 students last year, while Bildungsinlaender rose by 3.6 per cent to 88,763 students. Overall, international students constituted 12.3 per cent of the higher education student body in Germany last year, a slight rise compared with 11.9 per cent in the previous year.
China was the largest source country and accounted for 12.8 per cent of all Bildungsauslaender with 32,268 students - a 6.6 per cent rise. India was the second-largest source market, and grew by 16.1 per cent to 13,537 students. The top five was completed by Russia, Austria and Italy.
Seventeen of the top 20 source markets increased in 2016 and only one of the top ten had fewer students than in 2015, as Russia registered a slight decline to 11,413.
More than two thirds of Bildungsauslaender were enrolled on either bachelor (35.9 per cent) or master's degrees (34.3). Engineering was the most popular study field for Bildungsauslaender, accounting for 36.2 per cent of enrolments, followed by Law, Economics and Social Sciences (26.4).
DAAD said that over the last five years, Thuringia had the largest growth in Bildungsauslaender at federal state level (61.7 per cent), followed by Saxony (55.2) and Bavaria (54.5), compared with the country-wide increase of 36 per cent over the same period. North Rhine-Westphalia remains the largest host state and welcomed 57,379 students last year.
Agents have told StudyTravel Magazine that they have increasingly found ways to work with Germany's virtually free higher education system, including the promotion of academic preparation and pathway programmes.
In StudyTravel Magazine's annual surveys of language schools in Germany, the number of students in the 19-to-24 age-group increased by 83 per cent between 2011 and 2015.
In the recent Market Analysis Germany feature, providers including EURASIA Institute for International Education and F+U Academy of Languages confirmed that interest is growing in pathway programmes, and Kapito Sprachschule said demand for German language exam preparation courses was rising.
By Matthew Knott