Student loan scheme may hinder rather than help

Analysis: Some students might not attend university if it involves incurring debt

 Students at the University of Limerick. File photograph Liam Burke/Press 22

Students at the University of Limerick. File photograph Liam Burke/Press 22

 

Irish higher education has entered an era of “massification” with well more than half of school leavers now progressing to university or college.

The national target is that by 2020, 72 per cent of 17-19-year-olds should enter higher education.

This target is determined by the estimated rising demand for third-level qualifications to support an increasingly knowledge-based economy.

Viewed in this light, higher education is no longer the preserve of a privileged few.

In a knowledge society it is as vital as second-level education was to earlier generations.

At the same time Irish higher education is underfunded compared to its OECD counterparts.

In recent years Irish institutions have admitted greater numbers of students while managing reduced staff numbers and funding.

We accepted that we had to bear our share of the national burden and operate in a more constrained funding environment.

But the consequence is that the average funding per student has reduced by more than 20 per cent.

In some key disciplines the reduction has been more dramatic.

For example, in 2008, we received €13,500 for each science student but that had fallen to €9,200 in 2014, a 32 per cent cut.

During that time the student contribution increased to its current level of €3,000 per annum.

As students paid more for their studies the amount of funding available to support them decreased.

What do you think?

To be truly competitive, to support the economy and provide the best opportunities for our students and graduates, funding on an international scale is required.

But the challenge is to work out how to do that: in particular, who should pay and in what proportions. The Expert Group on Future Funding for Higher Education has been handed the unenviable task of answering that question.

Attractions

It follows that the likely source is students, or their families, either through higher fees or a student loan scheme.

This approach has its attractions. After all, graduates tend to earn more and the argument that those who benefit from higher education should pay for it seems compelling.

Moreover, there is the view that requiring students to pay for education will make them value it more.

We often look to England for policy guidance. There, students pay up to £9,000 per annum and it seems that the English loan scheme has not deterred students from more modest backgrounds from going to university.

It is not difficult to see where this is leading us: that Irish students should pay for their education, supported by a loan scheme.

While this outcome might meet the concern that the beneficiary should pay, the devil will be in the detail.

Other considerations should give pause for thought, in particular the possible consequences on access to higher education.

Any funding formula should ensure that access to higher education is not curtailed either by high costs, or a reluctance to borrow.

More students currently entering higher education qualify for a grant.

In some universities, my own included, almost half of recent entrants are in receipt of a grant.

Those students come from less affluent families but they are the very group that might be deterred from attending college were they required to pay more, or incur debt.

Going to college is to this generation what a good Leaving Certificate was to their parents.

It is reasonable to expect students to contribute to the cost of their education but not to the extent that it would deter young people from pursuing their educational ambitions, or realising their talents.

Student fees should be set at an affordable level.

There may be a case for some form of loan scheme but we must guard against one that transfers cost to those who are less able to bear it.

The political temptation to bring some grant-eligible students to reliance on a loan scheme is very real but it should be avoided.

We must not overlook the case for increased State funding per student to ensure that as many young people as possible get a fair start in life.

This is not to saddle taxpayers with an unnecessary cost: it should be seen as an investment in their children’s futures.

Incidentally, increased State funding would be a mixed blessing for universities. At present we have reduced our dependence on State income to the point where that source accounts for less than half our income.

In general, a diverse range of funding – State grants, student fees, international income, commercial activities and philanthropy – is preferred.

As the proportion of State funding increases there are the twin concerns of continued underfunding and greater State and political involvement in the management of our institutions, more particularly State micromanagement and a loss of the autonomy that is so important to an internationally credible university system.

Prof Paul McCutcheon is vice president academic and registrar, University of Limerick

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