Government to leave door open to student loan scheme

The Government will leave the door open to the introduction of a student loan scheme on Wednesday when it opposes a motion to abolish student registration fees for third-level education.

The Labour Party is due to table a private member's motion in the Seanad rejecting any move to implement an income-contingent loan scheme and calling for a fully publicly-funded scheme.

Government sources say a counter-motion will be proposed which will say that all parties have a responsibility to help develop “sustainable funding sources” for the sector.

The motion will also recognise the importance of building political consensus on a future funding model for higher education and will support the Government's intention to await the outcome of Joint Oireachtas Committee on Education before a policy decision is taken.

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This committee is currently examining the Cassells report on the future funding of higher education, which put forward an income-contingent student loan scheme as as one of a number of options.

Labour Party Senator Aodhán Ó Ríordáin said the party favoured a publicly-funded third level system and estimated that the cost of abolishing fees would be in the region of €222 million.

Payroll levy

He said this could be funded through modest increases to a payroll levy for employers.

“If we look at the English experience, we see students who are saddled with debt through their 20s and 30s. There is no logical reason why we should accept that model.

“It costs about €16,000 a year to fund a second-level student’s education. No one is asking students to pay that back, so why should it be any different for third-level students?”

Mr Ó Ríordáin acknowledged that a Labour minister in government had increased the student registration charge despite earlier pledges not to do so. He said this was a mistake that "should not dog us forever" and had been done so to prevent a Fine Gael plan to introduce a student loan or graduate tax proposal.

A Government source pointed out that it was a Labour minister for education that commissioned the Cassells report which made its recommendations to government last year.

The source also said the cost of abolishing the student registration charge, and providing for an expanded this level sector over the coming years, was in the region of €1.3 billion extra per annum.

“It is easy to find fault with one proposal or another. If different political parties agree with the ambitions set out in the Cassells report for the higher education sector, but disagree with the options put forward to fund those ambitions, then they must outline where we will find the money to pay for the extra investment that everyone agrees is needed,” the source said.

The Government counter-motion will note that the an additional €160 million has been pledged over the next three years for higher education.

It will also highlight an initiative to explore the possibility of an employer-exchequer funding mechanism which could realise up to €200million in additional annual funding.