In 2014 the number of foreign students in Germany broke the 300,000 mark for the first time, the study named "Open-minded Academia 2015" showed.
With a total of 301,350 foreign students currently working towards a degree, roughly every tenth student in Germany comes from abroad.
The number is a 7 percent rise on 2013, reports the Frankfurter Allgemeine Zeitung (FAZ), and makes the government target of 350,000 foreign students by 2020 seem ever more plausible.
"There is no better proof for the international appeal of our higher education system,“ said Education Minister Johanna Wanka in a statement.
Almost half of foreign students come from other European countries, with Russian being the most common European nationality.
But the number of Asian students has risen dramatically, with China and India playing an ever more important role.
China is the country from which the most non-German students originate, at over 28,000 of the total.
Engineering is especially popular among foreign students, a reason for cheer, says FAZ, since Germany has a large gap in its job market when it comes to trained engineers.
'We need the best minds'
Another positive revelation of the study is that foreign masters students are thriving, with a 91 percent pass rate. And of these around 60 percent say that they want to stay in the country for a period of time after their studies.
"Worldwide mobility is not just about scientific and cultural exchange, it is also about attracting highly skilled workers. We need the best minds from the whole world in order to maintain our spirit of innovation and to keep ahead of demographic changes,“ said Wanka.
The government is currently making investment in higher education a priority with €10 billion set aside for university funding over the next five years.
But there are also more worrying conclusions in the report.
Only 45 percent of masters students told the researchers that they regularly communicate with their German classmates.
Almost half said that they were not well integrated into life outside the university and 30 percent admitted to having weak German language skills.
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This appears to result in difficulties entering the labour market. A study published by the Foundation for Integration and Migration in June found that a third of foreign masters students who stay in Germany take over a year to find employment.
More Germans studying abroad
The study also revealed that ever more Germans are spending part of their university studies abroad.
Thirty seven percent of all students leave the German borders for Erasmus, an internship or a language course, for a section of their degree, meaning the government is optimistic of hitting its target of 50 percent of all German students spending time abroad.