COLLEGE GRADUATES would have to repay a debt of at least €25,000 under a student loan scheme being considered by the Department of Education.
The establishment of the scheme – and the return of student fees – are the key recommendations of the Hunt report on higher education, published yesterday.
The loan scheme could be run by the European Investment Bank, the National Treasury Management Agency or one of the British companies specialising in this work.
The Department of Education is examining various models for the scheme but it is widely expected to back a “study now, pay later scheme” proposed by former minister for education Batt O’Keeffe two years ago.
The O’Keeffe report at that time said teachers with an arts degree would face a debt of more than €21,000, engineering graduates would have debts of €31,000 and nurses would have debts of more than €23,000 at graduation.
Education sources said yesterday the minimum debt under the new scheme would be about €25,000, reflecting increased interest rates. On average, it would take graduates 10 years to repay the loan.
The loans advanced to students to pay annual fees of at least €5,000 could be repayable – possibly through the taxation system – once they had reached an income threshold after graduation.
Minister for Education Mary Coughlan said yesterday it was not her intention that students should be left with an unmanageable debt burden upon graduation; rather, students should make an equitable contribution to the overall cost of the significant economic advantage they gained from higher education.
The new scheme has already been broadly backed by Fine Gael, which supports a graduate tax. Labour is opposed to any new student charges – but it could back a new student loan scheme in which there is no upfront payment of fees.
The Hunt report, which charts a course for higher education over the next two decades, was prepared by an expert group chaired by Dr Colin Hunt, a former adviser to Brian Cowen in the Department of Finance.
It says the higher education system requires additional funding of up to €500 million a year to keep pace with record student demand and to meet Government targets for the economy. Current funding of the sector – largely dependent on the State – is “unsustainable”.
With colleges facing a 30 per cent increase in student numbers, the expert group says annual funding must increase from €1.3 billion to €1.8 billion a year by 2020. It says funding should virtually double to €2.25 billion by 2030.
The Hunt report is also sharply critical of the Leaving Cert, saying students entering higher education directly from school often lack the skills needed for successful engagement at college.
The response to the report has been somewhat lukewarm, with critics claiming it “lacks new ideas” and represents a “missed opportunity”.
Ms Coughlan defended the report which, she said, provided a comprehensive overview of the issues facing the higher education sector. These issues, she added, would have to be faced by future governments irrespective of their political hue.
The Minister has established an implementation board tasked with overseeing delivery of the recommendations to be chaired by the secretary general of the Department of Education, Brigid McManus.
