Where the money will come from

Even in the era of ‘free fees’ Ireland has the second-highest third-level fees in the OECD. And still colleges don’t have enough money. Is there a better way?


One of the many ironies of “free fees” for higher education is that they didn’t even succeed in getting Niamh Bhreathnach re-elected. The minister for education who introduced the measure in 1995, at a time when Labour was trying to strengthen its middle-class vote, lost her seat in the general election just two years later.

At the Dún Laoghaire count centre on the day of her defeat, she suggested history might judge her more kindly, expressing the hope that the education system would “never recover” from her term of office. “We have crossed a great Rubicon in terms of the availability of third-level education for our people,” she said.

It’s fair to say the education system has never recovered – but not in the way she, nor her party, expected. Today students face a “contribution” charge which currently stands at €2,500 and is set to reach €3,000 in Budget 2015. As such, it’s not far off the level of fees abolished by the Rainbow coalition, a government that included Minister for Education Ruairí Quinn, who was then in charge of the department of finance, as well as Taoiseach Enda Kenny, who was then minister for tourism.

In fact, Ireland today has the second highest fees for third-level education in the OECD, after Britain. “Think about that for a moment,” says Mary Canning, a former consultant with the World Bank and OECD who is on the board of the Higher Education Authority (HEA). “That’s a bit of a showstopper, isn’t it?”

Universities complain that the abolition of fees has undermined their financial stability, and has left them dependent on State handouts in an era of austerity. But, most damning of all, there is little or no evidence that access to third-level education for poorer students has improved. Although numbers attending third level have risen, the proportion from low-income households has changed little. In a 2012 study, the ESRI said barriers to third levelwould be reduced only by a mix of factors such as career guidance, and financial supports for families.

“It was a total mistake,” says Canning of the abolition of fees 18 years ago. “Not only did it not benefit the poorer kids in the community but it’s actually regressive . . . Kids in south Co Dublin are being financed by the taxpayers in Finglas. The policy has fundamentally not benefited the people who we would have wanted to benefit.”

Student contribution

The problem is what to do now. Quinn has already taken political flak for tearing up a commitment he signed before the last election not to increase the student contribution. The “reintroduction” of fees could spark a revolt from a segment of the electorate hit by property taxes and water charges.

A new Government-backed loan system has been mooted but this is no panacea, as Quinn himself said this week. First, the loans need to be repaid and the Union of Students in Ireland (USI) has warned such a system would quickly lead to graduates incurring large, life-long debts akin to their peers in the US. Second, the system would need to be underwritten by huge financial reserves.

Quinn has asked the HEA to report later this year on how to bring “sustainability” to the sector. All stakeholders agree that the next policy decision will shape higher education for decades to come.

Asked to predict the future of third-level education, USI president Joe O’Connor replies: “Stuff does not just happen by accident, and where we are going to be in 10 years’ time will be very much in the context of the decision on funding.” Backing the universities’ claim that no more efficiencies can be generated, O’Connor says services have been severely cut and “the well is running dry”.

One option is to do nothing, but university presidents argue that this will create its own legacy. Total Exchequer funding allocated to universities declined by 36 per cent between 2008 and 2014, and the take-home pay of senior staff has gone down by almost a quarter, the universities say. Core staff numbers have decreased by 12 per cent since 2008, while student numbers have increased by 10 per cent in the same period.

The latest figures from the university sector show the staff-student ratio has gone up from 23.4:1 in 2007/08 to 27.4:1 in 2011/12.

Canning says the universities have a strong case for a change in the funding model. Noting that it costs the State about €25,000 a year to educate a medical student, she says: “Do not tell me that that’s fair, that people would get that free education. The kids who are getting into medical school are normally those who come either out of the private-school system or have managed to get grinds, or have been prepared and groomed . . . “My solution to this – which I think is incredibly fair – is you make people pay the full cost if they can afford to pay it, or you can give it to people free but they then have to spend three or four years giving that time back as doctors, vets or pharmacists.”

Many academics fear higher fees will turn education into a commodity. But Canning says: “Number one, we always had fee-paying education in this country; this is not a sudden commodification. Number two, the individual returns from higher education over a lifetime are still much greater [than the cost]; therefore it’s not unreasonable to ask people to contribute.

“The other thing to consider is that all the evidence shows that investment in early childhood and primary education gives the greatest long-term returns. So if you’re looking at a limited budget it is more equitable, but also of greater societal benefit, to invest it there.”

O’Connor of the USI says “I don’t think we will ever win the argument, from a societal view, that you should invest in higher education when primary education is underfunded. But if you look at it economically: graduates pay 70 per cent more income tax than nongraduates and the quality of our graduates is key to economic development, so the benefits of investing in higher education are huge. It also provides the space where people find their voice.”

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