University fees would be unjust without other radical reforms


We still have to work out a sensible and fair system of financing higher education, writes Garret Fitzgerald

THERE IS A fairly prevalent belief that the abolition of university fees in 1995 mostly benefited better-off parents, who are thought to have used consequent savings to secure advantages for their children in respect of university entrance, through greater use of grinds. This belief may partially explain the generally favourable reception in the media for the proposal to reintroduce university fees.

However, following the abolition of university fees there was in fact a slightly larger increase in the university entrance rate for children of manual workers than for children of business executives and the members of higher professions.

The fact is that the pre-1995 system of university financing badly needed radical reform, although unfortunately the opportunity to improve the system was missed at that time - possibly because of an excessively doctrinaire commitment to universal provision of social services. (Universalism has the merit of ensuring that less-well-off people do not fall through cracks in the system, as can happen with means-testing, but it does not suit all types of social provision).

For decades prior to 1995, the State, by paying two-thirds of the cost of university education, had heavily subsidised university fees. An unintended - and, in terms of social justice, totally perverse - consequence was that the only people who benefited were those well enough off to be able to pay one-third of the cost themselves.

Despite the fact that a not-inconsiderable minority are well enough off to pay for much, or even all, of their children's university education, the crude - and costly - solution for this gross inequity in 1995 was for the State to take over the whole cost of university education.

Now, because all children benefit from the earlier stages of education it makes sense for it to be free at least up to the Leaving Cert. But it is far from clear that there should also be universal provision of higher education, from which a substantial proportion of young people do not and are never likely to benefit.

As common sense would lead one to expect, it is clearly established statistically that higher education increases substantially the average lifetime earning-power of most of those who secure access to it. So, in addition to the very important public economic and social, as well as cultural, benefits accruing to the whole of society from a well-educated population - which Michael Casey on this page last Wednesday appeared to ignore - substantial private advantages accrue to most of those who go on to higher education.

If, however, the introduction of fees were to have the effect of making it more difficult for the children of less-well-off people to secure higher education, that would outweigh the social argument in favour of fees.

But if adequate steps were taken to protect access to higher education for the less-well-off - and only if that were done - it would in principle be reasonable to expect those benefiting later in life from higher education to make some eventual contribution towards its cost, which will have been partially financed by taxes paid by those who were not able to proceed to that level.

The means-tested fee and maintenance grant system introduced in 1968, which in its current form offers some assistance to 38 per cent of higher education students, had been intended to deal with this problem. But its impact was limited by the severity of the means test.

Moreover, these maintenance grants are grossly inadequate for children of less-well-off parents: the maximum annual payment is €3,420 for students living at a distance from their higher education institution, and €1,320 for those living nearer.

Historically, there has been a marked reluctance to improve this scheme - for two reasons.

In the first place, almost all students earn money at holiday times, and some also do so when they are actually attending their institution. This factor has confused the equity issue.

Moreover, politicians also have reason to believe that many non-PAYE taxpayers who have substantial property are able to exploit this system, the means test for which excludes assets and is confined to current income, and which many such parents are believed to fiddle. If university fees were to be reintroduced, a radical review of the present means-tested maintenance grants system would be necessary, increasing substantially the amount of these grants. This could be financed partly through introducing into the maintenance grant system an asset, as well as an income, test in order to eliminate current abuses.

Moreover, so as to ensure that less-well-off families would not lose access to higher education, it would be essential to introduce, and to promote vigorously, an interest-free loan system, involving repayments deferred until students reached the stage in life where their incomes would enable them to repay such loans without hardship.

Without these two radical reforms, no consideration should be given to the reintroduction of university fees.