The unsustainability of the current higher education funding model will become further strained with the demographic increase in third level students projected in the coming years. The Cassell’s expert group on higher education is expected to report on the options available to the government in December 2015. Fianna Fáil youth wing Ógra have come out to start the dialogue with a policy proposal for a dual income contingent loan scheme to provide for both maintenance grants and the registration fee. To source the anticipated shortfall in higher level funding the document also proposes a rise in fees to €5,000 per year. The Tribune interviewed the Ógra policy director behind the document – Ian Woods.
“This is a proposal that will bring in an Australian style Student loan system into Ireland and there are two key parts; we want to bring in a government funded low interest maintenance loan for students that can’t afford to attend college and can’t get grants. The other part is we want to bring in the same loan system for the current registration fee, and at the same time increase the registration fee by €2,000. This will make education free at the point of access. The key part of the loan system is that its income contingent, which means you don’t start paying it until you start making money. The cost of providing university education at the same level for the next four years will skyrocket. And nobody is really talking about what that means for our current fee structure. The fairest way we’ve come up with is that we’d ask students to pay a bit more. But they don’t have to pay it up front and they’d only be paying it back when they could afford it.”
The criticism was put to Woods that such a scheme would, while being income contingent, burden students with considerable debt later in life. Taking a conservative estimate a loan for partial maintenance through college (20,000) and a loan for the registration fee for a three year degree (15,000) would amount to €35,000. Ógra launched the scheme as being free at the point of access, thus opening college up to people who currently can’t afford the registration fee. But the gamble on taking out such an extensive overhead of debt it could be said would be an even greater inhibitor and disincentive for someone from a lower socio-economic background. Woods was adamant however that repayment would not be overly cumbersome or exhaustive. “Because its income contingent and the rates you pay are set, it can never become over-burdensome… We admit that any student loan proposal is going to increase student debt. The option now for student is to go to banks, get charged much higher interest rates, and if they are from vulnerable socio-economic backgrounds and can’t get grants they don’t get to go to college.”
In examining Student Loan models in effect in other countries the issue of student debt is clearly a problem. The US student debt bubble stands currently at $1.3 trillion, higher than mortgage or credit card debt. The New Zealand loans system has also afflicted students since being introduced. Rory McCourt, the President of the New Zealand Union of Students Association spoke to the Tribune about the malignant consequences of an extensive student loan scheme has had in their country. “The loans scheme has allowed fees to rise without protest by students. There is a general feeling that since the cost isn’t met up-front (and that it is interest-free) that it’s not ‘real money’ we’re borrowing. Under the scheme student debt has doubled every ten years on average… reaching $15 billion in February. We think this way of funding tertiary education is extremely unfair, and ultimately unsustainable if we want a society where individuals and families own wealth, not debt.”
The Australian system, while fairer than the New Zealand or US models cannot simply be supplanted onto the Irish education structure. In their system fees are set at different rates for different courses, so an Arts course may be cheaper than a STEM course, which is reflective of the estimated ‘return’ on that degree. In Ireland, with fees being standardized, there would be no reflection of the potential future earning discrepancies between degrees. So the burden of debt while manageable for a STEM graduate may not be so for an Arts graduate. When put to Ian, himself a Biotechnology PhD student, that there might be different fees for different degrees he stated – “We don’t think it should be part of the [Irish] university system.”
The Ógra model put forward, while alleviating the up-front registration payment places the onus of funding third-level institutions on students themselves. The loan scheme taken in isolation provides a solid mechanism to enfranchise students who cannot immediately afford the registration fee or the cost of attending college. However in tandem with the €2,000 hike in student fees it sets a dangerous precedent to shift the obligation of meeting the indefinite rising cost of third-level education away from the state and towards students. Woods came out in strong disagreement with this suggestion. “Under our plan the government pays more money than it does now. The 300 million fee [raised by the €2,000 increase] won’t get us to where we need to be, it’ll pay about half and we want to see that matched by the government. The ideological argument is that it’s a public good so the government should pay for it. But so is social housing, so are primary schools, so are secondary schools, so is infrastructure. There’s no guarantee that students will come ahead of any of those concerns. I think some sort of student contribution is the most realistic position.”
The government report on the future of higher education funding to be released in the next month will likely reinvigorate the debate on third level fees. The Irish state’s trend since the recession has been to retreat from the public sphere and pass the shortfall of funding public institutions, like education, onto the individual’s shoulders. Students therefore should be wary that if they do not engage and inform themselves in the debate they could be left funding the indefinite upward obligations of higher education into the future.
- Jack Power