Student loan scheme a non starter

11 July 2016

The funding of third level education is a critical issue and there is no doubt that in the wake of the economic crash in 2008 and the fiscal crisis that it brought about, third level education was among those sectors worst hit. However, I’m not sure that the headline recommendations contained in the Cassells Report, published today, are the answer.

I note the report’s proposals to consider three broad options for funding models: a fully state-funded system; increase in state funding with retention of a student contribution; and a student loan scheme. My initial reaction is that the student loan scheme as reported in the media today, will not be workable. It would be unfair to add further pressure to young people starting out on their career, and this is precisely the impact that a student loan scheme would have.

It would do nothing to attract more young people into third level, and all evidence shows that a loan scheme like this would impact low and middle income families disproportionately, while having virtually no impact on participation rates among the better off.

It is also the case that state-run student loan schemes take a considerable number of years to begin to break even, with the exchequer liable for a considerably larger impact in the early years of the operation of a loan scheme. It is far from clear to me that funding a massive student loan scheme is the best way to reduce costs for families and increase investment in third level in the years ahead.

I am not confident that the Cassells Report will have the impact that the author might hope for, and I fear that the outcome will be to postpone critical decisions with regard to higher education. That is very regrettable.

It seems that that it is the Minister’s intention is to bury this report in a consultative process, which would indicate a complete lack of abandonment of any decisive action in this key area.

The report is now being shunted into touch, so that the Government can avoid at all costs, having to make a tough decision. Unfortunately this has become the pattern since the inception of this Government.

Richard Bruton this morning stated that the report would be considered by government and by the Oireachtas Education Committee, a process that he said could take a year or more.

That’s all well and good, and I’m all for ensuring that complex issues are properly teased out, and examined in detail, but funding for our universities and colleges is something that we really do need to tackle with some urgency.

Investment in third level education is crucial for jobs, productivity, and economic growth, but I am very nervous about Minister Bruton’s plans for performance- based funding instruments and targeted competitive funding programmes, which would include a bidding process for resources and competitive calls.

These mechanisms may well have a place when it comes to a research in the Science, Technology, Engineering and Mathematics (STEM) subjects, but are of little or no relevance when it comes to disciplines such as arts, languages and humanities – disciplines that over two thirds of our students are studying.

Third level education should be more than just a conveyor belt, producing a ready supply of graduates with whatever skill set the multi-national companies happen to need at a particular moment. It should always be a holistic process, with a core objective to produce well-rounded, inquisitive and ambitious young graduates, regardless of what they studied.

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