Third-level education and loans system


A chara, – Tom Collins’s piece on higher education funding cites a claim that income-contingent loans can work in countries that are smaller than Ireland or larger (Education Opinion, May 11th).

Remarkably, Ireland occupies a sweet spot that apparently just renders it impractical to have such a system. It is worth noting that, after Australia (1989), the oldest such system is that of New Zealand (1991). Its population is 4.6 million compared to Ireland’s 4.64 million. New Zealand, incidentally, experiences a significant outflow of graduates. Size – or emigration – does not appear to be a fundamental barrier there. As with rugby, we could learn a lot from the Kiwis. – Is mise,


School of Economics,

University College Dublin,

Belfield, Dublin 4.

Sir, – An important clarification is required regarding Prof Collins’s explanation of income-contingent loans; repayments only happen during those times where the graduate is earning above a specified threshold of income. Individuals moving from above the threshold to below, voluntarily (eg through career breaks, volunteering, child-rearing, etc) or involuntarily (eg illness), have repayments suspended until such time as they may return to earning above that threshold. This feature is key when talking about the potential of any loan system (or indeed any funding system in general) to disincentivise participation in higher education.

The implication that income-contingent loans would have a negative impact on participation, in particular on non-traditional students, flies in the face of a significant body of published research in the field. There are many socio-economic barriers influencing participation, stretching all the way to pre-school level, and that focussed efforts in these areas can have a significant impact. Mention of regressive effects of withdrawing State grants for tuition fees is obfuscatory; a grant system can be designed to work alongside, or included within an income-contingent loan system, and either variant would be progressive rather than regressive. A further straw man is put forth with regard to common fee structures for pathways with different earning potential; again, if desired, different fee structures could be included in any income-contingent loans system.

However, when one mentions equity and regressive or progressive impact, do we really want students choosing pathways based on cost rather than aptitude and life ambition?

As for the ideology of transferring a State cost onto the shoulders of the student, this is the current reality, and one which the income-contingent loans system moves us significantly away from.

The contention that Irish higher education institutions and disciplines are highly stratified, especially in social class terms, is probably correct, but the issue is again disjointed from that of the funding mechanisms, rather pointing to more deep-seated structural problems in our educational system and indeed society. Making some institutions completely free to access and others fee-paying would only significantly enhance any social stratifications rather than addressing or even mitigating the underlying issue.

Most arresting of all the suggestions is that the income-contingent loans system should be used to generate revenue to finance those components Prof Collins believes should be free. In this scenario the public funding of parts of the (university) system which produce a public benefit is effectively removed to impose an additional cost on those students to provide private benefit, at no cost to the individual students in the institutes of technology. Prof Collins doesn’t seem to note any irony here in advocating an income-contingent loans system for these university students.

The underlying reality behind all of the debate about higher education funding is that it is never free; it is rather a question of who pays. Many, perhaps most, in the sector would, in an ideal world, like all higher education to be entirely funded from the public purse, but pragmatism dictates that this will not be possible. The arguments put forward by Prof Collins against the income-contingent loans option do not hold up to scrutiny, while the political and social consequences (even before we entertain economic arguments) of implementing his suggestions could be catastrophic.


Rathfarnham, Dublin 16.

Sir, – Paul O’Brien asserts (May 10th) that the impetus behind student loans is to shift the burden of financing higher education from the present generation to the next one. In fact, it places it where it belongs – on the beneficiaries. If each of the next generation will earn an average of an extra €8,000 a year throughout a 40-year career, they should be happy to borrow enough (say, €20,000) to cover third-level costs. Moreover, this would provide some relief to the parents who shouldered the burdens of their first 18-plus years, and neither expected nor received recompense. Over and above their loan repayments, the now higher-earning graduates will have to pay more income tax, so state and society will also gain throughout their careers. – Yours, etc,