Revenue may collect student loans under proposed scheme

The Revenue Commissioners could be given a role collecting student loans under proposals drawn up by an expert group on the future funding of third level education.

The group, which is due to finalise a draft report next month, is exploring the option of students paying for their college fees via the income tax system through contributions based on their future earnings.

Overall, members are understood to favour keeping higher education free at the point of access for students which would require an income-contingent loan system.

In addition, there is a preference to keep a maintenance grant system in place for low-income families.

This would help ease the burden on students from low- or middle-income families who may face paying tuition fees later in their careers.

This is in contrast to England, where maintenance grants have been abolished and now form part of a student loan scheme.

Under an income-contingent loan system, it is likely that graduates would only begin to repay fees when their earnings reach a set minimum amount, say sources.

Indexed-linked

In

Australia

, for example, this level is set at €36,000. While interest rates are not charged on these state-backed loans, the debt is indexed-linked to maintain its real value.

There is also support for continued State funding and potential contributions from employers to help keep the overall cost of tuition fees down.

A number of members of the expert group also support an independent body, such as the Higher Education Authority, being given the task of regulating the cost of tuition fees.

This is due to concern that universities would seek to hike their fees, as has happened in other jurisdictions.

In England almost all colleges have moved to charge fees of up to €12,000 a year, the maximum allowable under their system. However, in countries where there is greater control over fees, such as the Netherlands, the cost of tuition is about €2,000 a year.

The Expert Group on Future Funding for Higher Education is expected to send a draft report to Minister for Education Jan O’Sullivan for consideration next month.

However, the Government is unlikely to make any decision on the options presented in the report in advance of the general election.

Significant pressure

After seven years of spending cuts, rising student numbers and falling numbers of academic staff, the higher education sector is under significant pressure.

Under the “free fees” system – introduced in 1996 – students face paying an upfront contribution of €3,000. This fee, which has climbed significantly in recent years, is causing hardship for many families who are not entitled to grants, according to surveys.

High birth rates in Ireland mean the number of students entering higher education is projected to grow by almost 30 per cent by 2028.

It is projected that annual funding will need to rise by another €1 billion just to meet this demand.

A final report is likely in the new year.

Yesterday, members of the Teachers’ Union of Ireland protested outside institutes of technology over cutbacks which they say are damaging students’ education.

"Students have to deal with larger class sizes and considerably less access to essential facilities", said TUI president Gerry Quinn. " They also have to endure sharp cuts to tutorial and student support provision."