Funding crisis: where the political parties stand on a student loan scheme

The next government will need to decide how to fund our creaking third-level education system

Politicians are fond of praising the role of higher education in Ireland. Our universities, they regularly say, are creating jobs, raising living standards and giving Ireland an edge in the global marketplace.

But they aren’t so keen on highlighting the creaking funding system that is propping up the third-level sector.

After seven years of spending cuts, rising student numbers and falling numbers of academic staff, the sector is under pressure as never before.

The Expert Group on Future Funding for Higher Education was established a year and a half ago to draw up a series of options for the Government on how to reform the funding system.


Its blueprint, to be published shortly, is expected to lean heaviest on one area: deferred fees, or income-contingent loans. Under this system, higher education would be free at the point of access for students. Student loan repayments would be triggered only when a graduate starts earning above a minimum threshold.

With an election looming, the Government is unlikely to commit to any of the report’s recommendations. It will be a matter for the next administration to address.

So is there any chance of the report’s proposals securing sufficient political support to survive the bear pit of next year’s general election?

Political parties’ pre-election manifestos will be a key test of whether the proposals will find their way into the programme for government of whoever leads the country in 2016.

Bigger parties

Parties aren’t due to publish their manifestos until the election starting gun is fired, but some themes are clear.

Most of the bigger parties are opposed to an increase in fees but are broadly supportive of a move towards a student loan scheme.

Fine Gael supported a "graduate tax" in the run-up to the 2011 election, which is not far off the option due to be outlined in the expert group's report. Its proposal involved students contributing about a third of the cost of their course after entering employment and reaching a defined income threshold.

Labour was opposed to a graduate tax for students in the same election and, in effect, put the issue on hold by setting up the expert group. Sources in the party indicate that support is growing for an income- contingent loan system, subject to a number of crucial conditions.

Ensuring third level is free at the point of access is one. Providing sufficient maintenance grants to ensure lower-income students and families are not unfairly disadvantaged is another.

Fianna Fáil, which also opposed a graduate tax proposal in 2011, released an official policy in recent weeks – without much fanfare – which is opposed to fee increases but supportive of income-contingent loans.

“These loans will ensure that all students have the financial backing to pursue a top-quality third-level education,” says the party’s education spokesman, Charlie McConalogue. The party says graduates will not have to begin repayments until they are earning above a certain income. If graduates do not earn more than this threshold, they will not have to repay the loan.

Importantly, it says students from low- and middle-income households should be able to receive more maintenance support than now.

Sinn Féin, however, says it is not in favour of a state student loan system. It says education must be free at the point of access, supported by grants. “People should be not penalised by long-term debt for going to college,” a spokesman said. If any public student loan body is to be established, it says, it must lend at favourable terms to students, and at lower than market rates.

Messages from students are mixed. The main student representative body, the Union of Students in Ireland, is fiercely opposed to a loan scheme and says employers should stump up more of the cost. It fears loans will heap debt on the shoulders of young people in an era when many at work are struggling to pay rent or get mortgages.

Yet Trinity College Dublin’s students’ union recently defeated a motion seeking opposition to such a proposal. In addition, Ógra Fianna Fáil is at odds with the senior party; the youth body supports a loan system alongside a “modest” rise of €2,000 in the current student charge, bringing it to €5,000.

Mounting pressure

The shape of the next government may not be clear, but one thing is certain: the new administration will not be able to put off urgent decisions over the future funding of higher education for much longer.

If anything, the pressure is set to mount in the coming years. High birth rates in Ireland mean the number of students entering higher education is projected to grow by almost 30 per cent by 2028. Annual funding will need to rise by another €1 billion just to meet demand.

"The status quo is not sustainable," wrote Peter Cassells, chairman of the expert group, summing up the predicament facing decision-makers at a consultation meeting last October.

“Current funding levels are insufficient and the funding model requires reform.”