The most common nationality of the students in my undergraduate class in the Netherlands is German. They pay the same fees as Dutch students. The same would be true for Dutch students in Germany — or in most other EU countries — under the agreements referred to as the Bologna Process.
It’s totally different from in-state/out-of-state tuition charges in public universities in the U.S. It’s not a bad idea-it encourages university students to flock to schools that they believe (rightly or wrongly) offer a better education. It means European students in general obtain a better education. The problem is that fees never cover average costs. Taxpayers in the net-receiving countries subsidize the education of net-sending countries’ students. I don’t see how this can be a stable equilibrium politically: If I were a taxpayer in a net-receiving country, I would not like having my taxes support the education of foreigners, nor would I be pleased to give foreign taxpayers the incentive to be free-riders on the educational policy of the E.U. The only hope is that some foreign students remain in the receiving country after completing education, so that the receiving country reaps a return on its subsidies.