Dáil Éireann Debate, Thursday - 6 July 2017
9. Deputy Thomas P. Broughan asked the Minister for Education and Skills the status of the feasibility study his officials are reportedly undertaking on the possible introduction of income-contingent loans for third level students; his views on income-contingent loans and the general funding of higher education; and if he will make a statement on the matter. [31575/17]
View answerA few weeks ago, Deputies, including myself, received a very good briefing from the Union of Students in Ireland and specifically from Mr. Kevin Keane, Ms Eleanor Nyhan and Mr. Kieron Pierson. They remain very opposed to the concept of income-contingent loans, which is the third option in the last year's report. The Minister told me he was preparing a technical evaluation of that option in response to previous questions and I also asked the former Taoiseach, Deputy Kenny, a while back. The Minister mentioned he hopes to deliver an extra €160 million in funding over three years to the higher education sector and a national training fund levy. Is it now time to abandon that proposal and get on with funding third level education?
I wish to emphasise at the outset that no policy decisions have been taken in this area pending the outcome of examination of the Cassells report by the Oireachtas Joint Committee on Education and Skills. The Cassells report, as the Deputy rightly states, considers a number of potential funding options, including the deferred payment of student fees. The report was referred to the Oireachtas committee on education and skills by my colleague, the Minister, Deputy Bruton, in order to build political consensus on the most appropriate sustainable future funding model for higher education. I look forward to receiving the recommendations from the joint committee once it has concluded consultation and engagement with relevant stakeholders.
Arising from the future funding options presented in the expert group report, technical work relating to income contingent student loans is being undertaken by an interdepartmental group chaired by the Department of Education and Skills. This work of the interdepartmental group is intended to address some of the practical issues that will have to be considered if there is a policy decision in the future to introduce an income-contingent loan scheme. It is clear that doing nothing is not an option when it comes to the future funding of higher education. To this end, the Minister, Deputy Bruton, secured additional funding in the last budget of €36.5 million. This is part of a three-year package amounting to €160 million for the sector. This is the first increased funding that was received for higher education since 2009.
I wish the Minister of State well in her new role in looking after higher education.
I thank the Deputy.
There are powerful arguments against income-contingent loans. We can consider the evidence from the UK, where 75% of students are expected to not pay off student debt and combined student debt now exceeds €100 billion. Those are incredible figures. We had an excellent study from Dr. Charlie Larkin from Trinity College Dublin and Dr. Shaen Corbet. Dr. Larkin's report, Public Education and Civic Responsibility in a Constrained Financial Environment, highlighted the fact that national debt would increase by approximately €10 billion over the first ten years if an income-contingent scheme was operated. Senator Bacik of the Labour Party has a motion in the Seanad on this exact subject and I have advocated that we would follow the French, Scottish and German model. The Minister and I represent constituencies where there are problems of access and there are parishes, as he knows, with less than 15% or 20% of people going to college, which is totally unacceptable. We do not want to make things harder for those people. We are an emigration nation and we do not want our children to emigrate.
I hear what the Deputy is saying. I noted at the outset that no funding model has been agreed and we are waiting for the Oireachtas education committee to come back to the Department and me on this. Last night I watched a programme on Sky about the funding model and its difficulties in the UK. I am taking all that on board. With the Minister, I will make a decision on this.
A Deputy drew the Minister of State's attention to the fact that third level pharmacy students are being asked to pay big fees for their final year before qualification. The Minister was to address that issue. Fine Gael and Fianna Fáil-led Governments cut third level funding by a third during the austerity years. We need an extra €600 million. Although people know what is needed, it is a key vital service that people are prepared to support. With regard to the improvement of access in areas of north and west Dublin, Waterford, Cork, the midlands and all around the country, it would be a disastrous route to follow as many counties have a poor enough third level record. We had the example in New Zealand where people were being stopped at the airport and not being allowed to leave the country because they owed income-contingent loans. I urge the Minister to abandon the idea. I hope the Taoiseach, Deputy Varadkar, will not come in to the House, as he did the other morning on another matter, and announce something on this education matter without consulting both the Minister and Minister of State.
The Minister of State indicated she watched a programme on Sky last night. A report was published in the UK yesterday and it serves as a very clear warning about the proposed system. I disagree with the people who have proposed it but they have done much interesting work. Yesterday's report makes for devastating reading for working class children if the system is introduced here. In England, the amount of debt a student has as he or she exits the system is approximately £57,000. The banks are gouging people with interest rates in the UK with the cheap rate of 6%. The Minister, Deputy Bruton, can do the compound interest maths problem, as 6% is an alarmingly high interest rate. The equivalent debt burden would be over €80,000 in Ireland as we have many four year degree programmes. It would be disastrous for working class children. How could any working class person take on a debt of €80,000?
I stated no decision has been made and we are waiting for the Oireachtas committee to come back on the matter. We will examine it. Deputy Broughan said funds were cut by a third. I am not sure it was quite a third but they were certainly cut severely. I wish to put on the record that numbers have grown in our third level sector. I thank the colleges that took in students and educated them while needing to have bigger classes. I understand that situation. No decision has been made and we will certainly consider the issue. I am able to do the compound interest calculation and I taught it in schools.
What is the figure?
We know exactly what are the difficulties for a working family. I know them as a mother who has lived on her own and who put two children through college. We will take all that into account.
