Loans system would deter working-class pupils from entering higher education, writes GARRET FITZGERALD
IT IS clear that higher education students are going to be asked to contribute to the cost of their education.
Although this will create some social problems, it is not unreasonable because higher education adds considerably to the eventual earning power of most of those who engage with it.
Moreover, while it makes sense for primary and secondary education to be free because everyone benefits from it, only 60 per cent of each age cohort enter higher education and some 50 per cent secure a qualification. It does not seem equitable that the half of the population who do not benefit from this experience should, through taxes, be required to help enhance the earning power of the other half of the population.
Society also benefits from the fact that a large proportion of its members – a higher proportion than in much of Europe – increase their productivity by higher education. This is why it makes sense for the Government to use some of our tax revenue to maximise the availability of higher education – although not necessarily to pay the whole cost.
If, however, a requirement that students pay part of the cost of higher education were to have a negative impact on third-level numbers, the economy would lose out. And because so much of our growth between 1993 and 2007 was due to the fact that multinational industries and service providers were attracted to our well-educated society, we should be especially sensitive to this risk.
In addition to the need to determine the balance between the contribution made by the State and that to be made by or on behalf of students, there is a further important consideration: social equity.
Prior to 1995, when the government took responsibility for the fees previously paid by or on behalf of students, the bulk of the cost of university education was met by grants paid by the State through the Higher Education Authority.
Even when that system was supplemented after 1968 by a means-tested maintenance grant scheme, this system was fundamentally inequitable, because access to the benefits of State financing that enabled universities to offer courses at only about one-third of their full cost was thus confined to those well enough off to pay the remaining one-third.
The reintroduction of such a regressive system would be intolerable. However, the Minister for Education’s assurance last Wednesday that “no group will be unfairly burdened” suggests that this should not happen.
His spokesman developed the Minister’s point further by explaining that the new fees scheme, to be presented to the Government next week, will be based on four core principles: “affordability, the need to widen access to the disadvantage, better participation in higher education and the need for overall equity”.
The new system should be one through which the great majority of those students whose parents’ incomes fall below the high level that would enable them to pay the cost of higher education, ( a threshold income of €100,000 a year has been spoken of), would have access to non-interest bearing loans, advanced to students by a State-organised fund. These loans would be repaid by each student some years after graduation, at a stage when his or her income has attained a level that allows gradual repayment.
What we do not know at this stage is what proportion of the costs will be covered by such loans – presumably not the full cost, for that would impose a heavy burden on graduates, and could be a deterrent.
Moreover, in view of the economic benefits to the whole community of having a well-educated labour force, it would clearly be inappropriate to load the whole cost of higher education upon individuals who engage in this process.
Another issue that needs to be clarified is whether this new system would apply to those attending institutes of technology. When, up to 1995, fees were payable, entry to these colleges was free. We also need to know what will happen to students who fail to complete their studies. Without a qualification, they will not have increased their earning capacity, so should they have to repay their loans?
Finally, the Minister needs to address huge defects in the university maintenance grant system. In addition to its cumbersome, inefficient, and tardy payment processes, I want to draw attention to the scandal of the exclusion of assets from its means-testing system. This omission is widely believed to have enabled many well-to-do self-employed people to secure grants for their children, by moving part of their income out of the year in respect of which they apply. The impact of these tactics has made this scheme regressive rather than progressive, which may help to explain why governments have failed to fund it adequately.
If, as is likely, these complex issues cannot all be sorted out at the forthcoming partnership meetings it would be important that agreement be reached there on a process of consultation.
Of course, any system of fees is bound to create problems. Students from working class families are less likely than those from middle-class families to be willing to take on long-term debt.
There is thus a danger that the progress made in opening up higher education to children of working-class families will be put at risk even by a loans system. Some special provision may be needed to counter this danger.
In 1980, only 8 per cent of working-class children entered higher education. Apart from the huge issue of social inequity, that meant that almost half of the country’s potential skills was being left undeveloped, to the detriment of our economy. By 2004 over 50 per cent of children of skilled workers were entering third level, as well as 35 per cent of manual workers’ children. Nothing should stop the progress of this gradual social revolution.