Student fee hike and loan scheme ruled out

Further increases to student fees or the introduction of a student loan scheme have been ruled out , the Irish Examiner can reveal. In a “highly significant” development, the Government has rejected two of three recommendations contained in a 2016 report into how a gaping hole in third-level funding is to be filled.

The Government said that “it is not enthusiastic or inclined to go down the road” of increasing current fees or to introduce a system whereby students take out loans to fund their education. For the first time, Taoiseach Leo Varadkar made his hostility to increased fees and student loans clear.

“I am not enthusiastic about or inclined to go down the road of increased student contributions or a student loan system for that reason,” he said.

“In terms of student contributions, I am very reluctant to see student contributions being raised. I am very reluctant to go down the model of a student loan system because I see in other countries how that leaves students graduating from college with very large debts.

“To a certain extent that is true in England and it is very true in the United States. That has long-term consequences. One of the reasons healthcare is so expensive in the United States is that people graduate from medical and nursing school with such high debts. That gets reflected on in terms of the cost of healthcare.

“I just don’t want students graduating with massive debts like they do in England and the US.

It’s hard enough to pay rent or save for a deposit without a big student loan to pay off also. I also see what happens in the US where people graduate with debts of 100k plus. It is inevitably passed on to the consumer in the form or higher costs for services — cost of seeing the doctor, cost of legal services, et cetera.”

The 2016 Cassells report identified the need for an extra €600m a year by 2021 to maintain quality in higher education, rising to €1bn annually by 2030. A further €5.5bn is required for ongoing maintenance, capital upgrades, and equipment renewal. The reintroduction of student fees of around €20,000 through income-contingent loans was one of three proposals in that report. It also suggested a predominately State-funded system and a third option to retain the €3,000 student registration fee.

Opposition leaders described the Government’s comments as “highly significant”. Labour leader Brendan Howlin accused the Government of seeking to “bury” the issue since taking office but said this is an important development.

Mr Howlin said his party has always been opposed to student loans, and that he prefers direct state intervention. The Irish University Association said that now the Government has made clear what it does not want, it needs to clarify how it intends bridging the shortfall in funding.

Director general Jim Miley said: “The comments by An Taoiseach on third-level funding give clarity on what the Government does not want. If this is now official Government policy, it is clear that the only other source of the much-needed funding is the State itself.

“We would urge An Taoiseach and his Government to act decisively and provide increased funding as it is now almost 1,000 days since the Cassells report was published which clearly identified the needs of the sector.”

Launching the report in 2016, Peter Cassells stressed that “the status quo and the funding model we have at the moment is not an option”.

The Department of Education is yet to undertake the economic analysis of the three options in the report. It said this will happen “in the course of this year”.