The abolition of college fees has provided "substantial subsidies to students whose families could well afford to pay" them, according to the OECD review of third-level education published yesterday.
Some 20 per cent of university students, it says, come from families with incomes in excess of €70,000 a year. "Making the wealthier section of the community, in a state which retains considerable disparities of income, contribute to the costs of their third-level education, is not the potential burden that it was" when fees were abolished.
In proposing the return of fees, its says their abolition in 1995 "has not had the effects that were hoped for in improving participation from students from disadvantaged backgrounds". It says the advantages of a third-level education, both now and predicted for the future, fully justifies students bearing a share of the cost of their education. The OECD wants fees to return, with a new student loan scheme and possibly a graduate contribution system. It also wants a reformed higher education grants and means-testing system to ensure that those most in need will receive support.
It also calls for incentives, such as expanded tax advantages, for parents and families to contribute to fees or living costs.
The review was commissioned by the Minister for Education and Science, Mr Dempsey. The Minister has pushed for the return of fees of about €4,000 per year for arts and business courses and €6,000 for medicine and other more expensive courses. But his plans failed to muster support from Cabinet colleagues and provoked outrage from the Opposition.
The review says the Irish third-level system stands at a crossroads, with vastly more investment required if the Government is to establish a world-class knowledge economy.
It says the system can no longer rely on State funding alone. The OECD wants the universities to be more hard-nosed in business terms and its wants them to recruit more international students.
"Irish tertiary education institutions are over-dependent on public funding; less reliance on the state would make them more competitive," it says.
The OECD is critical of the lack of a clear strategic direction for the sector and the manner in which policy direction is fragmented between the Department of Education and Science, the Higher Education Authority and various other bodies.
"Throughout our review," it says, "we have been struck by the consensus about the importance of the contribution of tertiary education to Ireland's economic future but also by the absence of a national strategy to ensure that the various components are well co-ordinated to achieve the performance levels that will be required if the nation's ambitions are to be realised."
It proposes a new tertiary education authority, "whose organisation should be constructed to prevent mission drift".
The report also says there needs to be much greater co-ordination of funding for research and for research infrastructure. It proposes making Science Foundation Ireland, the State's major national research funding body, analogous to the US National Science Foundation.
The OECD wants a new Cabinet committee for research policy to develop and oversee a national strategy for research, development and innovation.
It also makes the case for a new national council on tertiary education, research and innovation, to be chaired by the Taoiseach.