Opposition rushes to torpedo student loan scheme

When Richard Bruton called for a political consensus on the issue of how to fund higher education, he got it – but just not in the way he might have hoped for.

Within minutes of the publication yesterday of the Cassell report, there was a stampede of Opposition parties rushing away from its most eye-catching proposal: a student loan scheme.

Almost all parties say they favour a “free” third-level system and want to abolish the registration charge, but are less clear on how, exactly, this will be funded.

Fianna Fáil says the public cost of an income-contingent student loan scheme is "extremely uncertain" and would ultimately outweigh any short-term savings made by the State.

Sinn Féin has previously ruled out student loans, while the Anti-Austerity Alliance said “free fees” was the only option it would support.

Labour's education spokeswoman Joan Burton also dismissed the idea of a loan scheme.

No appetite

The world of “new politics”, then, seems very much like the world of old politics with no appetite for the kind of decisions that might pose a political challenge.

But there is no escaping the looming crisis. Funding for colleges has reached the point where cost-cutting has largely been exhausted.

At least seven colleges – mostly institutes of technology – are now in financial arrears.

About half of the higher education system is believed to be in a precarious financial position.

The quality of higher education is suffering as a result. Universities are sliding down international rankings and our lecture halls are among the most crowded in Europe.

Student drop-out rates are reaching alarming levels in some courses and we are now spending more on secondary students than undergraduates.

The Cassells report makes clear that if we are to arrest the decline of the sector, we will need the kind of sweeping reforms that can create a world-class system.

Additional funding

If student loans are off the table, that leaves two options: a fully State-funded scheme which includes the abolition of the €3,000 registration fee; or a modified version of the current system with additional public sector funding.

In an ideal world, third-level education would be free for everyone. But there is little sign that Irish taxpayers are willing to stump up the funds required for a free system.

It would require the State’s contribution leaping from 64 per cent to 80 per cent of a higher education system which is set to grow by about a third over the next 15 years or so.

This would require billions of euro of sustained investment at a time when there is huge demand of investment in health, housing and public sector wages.

That leaves the second option: maintaining the current registration fee and significantly increasing State funding.

This may be fine, as long as you assume the current student contribution of €3,000 is paid without difficulty by Irish families and is an appropriate and fair form of student contribution.

It also means that future funding will be left at the discretion of future governments who are acutely aware there are relatively few votes in higher education.

Against this backdrop, a student loan scheme – where education is free at the point of access – doesn’t seem such an unpalatable idea. But political parties seem unwilling to go there.

If Richard Bruton can secure consensus on ongoing additional funding, along with guarantees on how funding will be spent, over the coming years it will represent considerable progress. But whether it will amount to a long-term solution remains to be seen.