Student fees – pay now, pay later?
How to address the widely acknowledged funding crisis at Third Level is, arguably, the most pressing education decision that will face the next government.
A Government-commissioned report on how best to tackle the funding shortfall was finalised last week and has now been sent to the Department of Education.
That study outlines several options, including the introduction of an income contingent loan scheme to cover third level fees, a kind of “study now, pay later” system.
The report maps out sample repayment terms, based on fees of between the current €3,000 annually, up as far as €5,000. It envisages students leaving college with debts of between €12,000 and €20,000, to be repaid when, and only when, their earnings reach a certain level.
There are other options outlined in this report.
They include abolishing fees entirely, or maintaining the student contribution at its current level, both accompanied by a considerable increase in State funding to make up the shortfall.
But the student loan proposal is the one favoured by the heads of the country’s universities.
They see increased student fees as part of such a scheme as inevitable.
They argue that since third level education confers a private benefit on the individual, it’s only fair that that individual shoulders more of the cost.
But any such increase is strongly opposed by the Union of Students in Ireland. They say it’s unfair to burden young graduates with debt.
Both sides agree that additional funding is needed.
In 2008 the State paid for 80% of the cost of third level education here. This has now fallen to 65%. It compares with an EU average of 79% state funding. England has moved to a deferred payment/student loan system. There, students typically pay the equivalent of €12,000 in fees annually.
With the imminent publication of this long awaited report we’re coming to decision time. But in the various party manifestos published in the run up to the election this looming issue received scant attention.
With the political parties now in talks over a future government it’s worth looking at the positions of the two biggest parties.
Fine Gael in its manifesto said following the publication of the Expert Group report, it would outline a “complete funding plan for the higher education sector”.
Asked by RTÉ News whether the party would favour raising fees along with an income contingent student loan facility, a party spokesperson said they were not ruling anything in or out.
That’s a ‘Yes, maybe’.
Fianna Fáil said it was against raising student fees in the short term, for at least the next five years. A spokesperson said that while it would look at the possible introduction of low interest student loans to cover living costs, it would not support a “study now, pay later” loan scheme encompassing higher fees.
That looks like a ‘No’.
A student loan system would probably be accompanied by – or lead to – an increase in student fees. This would prove unpopular with students and their families.
However my impression – from listening to policy and decision makers in recent years, as well as those close to them – is that this is the option most favoured by the educational ‘establishment’.
Will this issue form part of any discussions between Fine Gael and Fianna Fáil? If so, will they agree a common position? It’s more likely that the question will be parked at least until a Cabinet is formed.
The Expert Group report – two years in the making – awaits publication.
Although much of its contents are already in the public domain, the report could inform the positions of the various parties.
In a statement the Department of Education said publication was a matter for an incoming cabinet to decide; any decision, a matter for the new government.