Colleges face crisis as funding in freefall

The third-level sector is expected to operate within budget and make cuts where necessary

Before the pandemic, colleges and universities were creaking due to a decade of underfunding. Now, with vital income from international students, commercial revenues and student accommodation drying up because of Covid-19, that creaking has transformed into a full-blown alarm.

The sector is facing a €500 million shortfall this year and next, according to a report released in May by the Higher Education Authority (HEA). The report said that the Government needs to put together a financial support package to support the third-level sector, but a Department of Education discussion document indicated resistance to this idea, preferring instead to only support individual institutions when they're on the brink; otherwise, the sector is expected to operate within existing budgets and make cuts where necessary. And without a new government, there's very little authority, in any case, for a caretaker government to make major decisions around third-level funding.

Jim Miley, director general of the Irish Universities Association, which represents the university sector, says there is little scope for universities to lower their cost base. "Seventy per cent of the cost base is on staff, and the numbers of permanent staff and pay is set by the Government, so university management have no capacity to respond here. Universities don't have the tools to manage their cost base."

Never restored

As State funding was cut from €9,000 to €5,000 during the last recession – and never restored – the third-level sector came to rely on other sources of income. “Covid-19 has wiped out those mitigation measures and it could be three or more years before they come back,” says Miley.


The problems are compounded by the possibility that, despite a fall in the number of international students attending Irish third levels, Irish students will not take up those places. Many students are likely to defer college because of financial pressures and because they’re less attracted to online lectures than to having the full campus experience, the HEA report says. Meanwhile, social distancing measures will mean fewer students can be physically present on campuses in any case.

Dr Barry O'Connor, president of CIT, says that one solution may be for third-level funding to become the responsibility of multiple government departments, not just education. "Funding for fine arts departments could come from the Department of Culture, Heritage and the Gaeltacht; for medicine, nursing and dentistry from the Department of Health; for courses like dairy science in UCC and agricultural science and veterinary science in UCD from the Department of Agriculture. While it doesn't change the costings, it could allow funding to be better targeted."

O’Connor is also hopeful that industry might help. “If we got more closely aligned with industry and outlined our value proposition, I believe they would subvent in-house programmes or scholarships on the teaching and research side.”

Miley says that a stability fund is urgently needed to address additional student needs, such as where family is out of work and students don’t have the same opportunities for part-time work – this is particularly vital if students from disadvantaged backgrounds are not to face a greater hit.

“Colleges will also need additional funds so they can implement measures associated with social distancing. Many lecturers will tell you that they had more contact from students who needed additional support online than they did face-to-face.”


The IUA is also calling for a “transformation fund” to build up their digital infrastructure. “While we have successfully done remote or online learning, including for assignments, and 250,000 students were given end-of-year assignments without any major issues, doing this on a sustained basis and still maintaining quality needs additional investment.”

Looking overseas, Sweden – an outlier in Europe for not bringing in lockdown measures – nonetheless responded to Covid-19 by paying for an extra 9,500 students to go to third level.

The loss of international students coupled with social distancing measures on campus isn't just about cash

“There will be people who have lost their jobs or graduates that need to be reskilled,” says Miley. “Why not pay to educate or upskill them rather than pay for social welfare?”

Miley says that research funding was already coming under pressure because of Brexit and now facing another hit as industry curtails research budgets in response to Covid-19.

"Companies aren't just here for tax breaks: they are here for the talent and skills generated through by the third-level sector, Science Foundation Ireland and the Irish Research Council. If we don't underpin them, we will be outperformed by other economies."

International students

The loss of international students coupled with social distancing measures on campus isn’t just about cash, O’Connor says. “It is a cultural loss too. We have, for instance, a lot of Indian students on campus and they add a lot to college life. And our students in areas like social care or engineering could miss out on a work placement for as long as this health crisis continues.”

A successful rebuilding post-Covid needs to involve the third-level sector, says Miley. “We need people to upskill and reskill and we need graduates. We are confident that, assuming the crisis comes to an end, we can rebuild lost revenues, but we need the right support at the right time and hope that we can open up discussions when a new government is formed.”