University heads back student loan scheme to tackle funding ‘crisis’

University presidents say the introduction of a student loan scheme is the fairest way of securing vital funding to tackle a “crisis” in higher education.

They were speaking at the first in a series of meetings of the Joint Oireachtas Committee on Education which is to draw up plans for funding higher education.

Prof Philip Nolan of NUI Maynooth said higher education was in crisis as a result of rising students numbers and tumbling State support over the past eight years.

With the number of student numbers at third-level set to climb by more than 25 per cent over the next decade, he said urgent decisions over a sustainable funding model were needed.

“We’ve kicked the can down the road for so long that we’ve run out of road - not just that, but we have a 10-tonne truck coming at us,” Prof Nolan said.

He said the Cassells report into funding higher education gave a strong indication that an income-contingent loan system was the best way forward.

This would involve graduates paying back tuition fees of between €16,000 and €20,000 once their income reaches a certain threshold - such as the average industrial wage - over a 10- to 15-year period, at low interest rates.

Increased investment

Such a system, he said, would need to be accompanied by increased investment from the State and contributions from employers.

However, he said it was vital to avoid the UK’s student loan system, where tuition fees were far higher and the government had ceased funding the sector.

While he said he understood fears around “debt aversion”, he said evidence showed that the proportion of people from disadvantaged communities going to college had increased in countries with income-contingent loans.

Prof Brian MacCraith, president of Dublin City University, said the "free fees" system introduced in Ireland 20 years ago had failed to bridge this social divide.

“In effect, free fees were a subvention for the middle classes,” he said.

He said the election of Donald Trump - who has pledged to slash US corporation taxes - was a reminder of the need to ensure Ireland produces top-quality graduates to compete for inward investment.

Prof MacCraith added: “We feel we have been teetering on the brink of quality disimprovement for a number of years. This is a chance to get it right - and the stakes are even higher now.”

By contrast, the presidents of the State's 14 institutes of technology were not supportive of a student loan scheme. Their umbrella group, the Technological Higher Education Association, said it would prove a disincentive for the majority of students in institutes of technology.

In addition to debt, it would also transfer fees until now carried by the State onto students, said Prof Ciarán O Catháin, chair of the association.

He suggested the Government could make a commitment to provide free undergraduate education to all who seek it.

One approach was to make higher education free for diplomas and ordinary degrees (level six and seven).

Prof O Catháin, president of Athlone Institute of Technology, said this would cost just over €45 million.

“A more ambitious approach would be to provide free higher education to all students on honours bachelor degree programmes (level eight courses). This would involve an additional net marginal cost of €197 million.”

Minister for Education Richard Bruton has avoided expressing a personal view on the best way of funding higher education into the future.

Instead, he has asked the Oireachtas committee to reach a “consensus” on a funding model for third-level.

The group is due to hear submissions from a range of other groups over the coming weeks.