Colleges cannot afford to build student housing

Restrictive borrowing costs are preventing third-level colleges from building student accommodation.

But the Department of Finance believes it could fall foul of EU state-aid rules if it offers tax breaks or other incentives to make it more affordable for universities to build complexes themselves.

The issue has arisen in pre-budget discussions with finance officials at a working group led by the Department of Education. It was set up a year ago to try and support the development of badly-needed student accommodation, particularly projects on campus or developed by colleges themselves.