University fees are going to be reintroduced. The only question is how and when.
The answer to the first question is found in places like Australia and New Zealand. There, all students who go on to third-level pay fees, but have available a government supported Income Contingent Loan (ICL) system which, when required, covers the cost both of fees and living expenses.
Individuals repay their loans during their working lives through the tax system. Repayment does not commence until one’s earnings rise above a certain level. The loan system not only covers fees but also living expenses, the most significant cost while at college. As a result neither parents nor students are faced with financial pressures during the time at college: the total cost is spread over the years after graduation.
In terms of social equity the system works well. Those who receive a third-level education are those most likely to be the high earners in later life and in the best position to repay the cost of their own education. In a free-fees system the privileged are subsidised by those who never benefit from higher education.
The abolition of fees in Ireland was launched with fanfare that it would increase participation by the socially disadvantaged. Yet it is forgotten that the socially disadvantaged did not pay fees: a grant system was already in place to cover the cost of fees and some living expenses. The reality is that those who were in a position to pay benefited most when fees were abolished in Ireland in 1996. Since then funds have been freed up in well-to-do families to support children in expensive schools and fill university parking lots with student cars.
One might be inclined to think that the rate of increase in participation in higher education by the socially disadvantaged would be lower in countries that charge fees and operate the ICL system. This has been shown to be incorrect by recent research which demonstrates the exact opposite: Ireland and the average of all the countries with fees-free education performed worse than those countries with fees and the ICL system.
The abolition of fees in 1996 made the universities greatly dependent on public funding, captives of the state bureaucracy as if they were components of an old Soviet-style command economy. Not surprisingly the Irish universities now fare badly in the international rankings. The latest and biggest international study to date fails to place any of the Irish universities in the top 200. Trinity is ranked 223, UCC 289, UCD 403, DCU 425, UL 557 and NUI Galway 724.
The issue is not one just about building stronger universities. It is one of national concern: in the knowledge economy competition is a race for talent and Ireland’s competitor countries are all moving to support and strengthen higher education. In 2004 the OECD published a report that highlighted the dire financial straits into which Irish higher education has sunk. It recommended a ‘quantum leap’ in third-level funding as essential if the Irish education system is to deliver on the ambitions the government has set for it. The OECD recommended the reintroduction of fees. The stark statements made by the OECD and its unambiguous recommendations have yet to be acted upon and the universities are now in serious financial difficulties. While research funding has been increased in an excellent way the foundations of the university, undergraduate and teaching activity, have been starved of resources.
One of the few advantages associated with the serious economic state in which the government finds itself is a growing public recognition that leadership and creative decisions are called for if Ireland is to rebound from its current difficulties. Introduction of a repayable loan system based on the New Zealand or Australian models could be seen in this context.
Most of Ireland’s competitor countries charge third-level fees in one form or other. Advanced countries such as Canada, Denmark, Sweden, the Netherlands, Australia and New Zealand charge university fees and have a variety of means to ensure that participation by the underprivileged sectors of society is encouraged.
In 2006 the UK introduced fees with a loan system. Germany and France, once the great bastions of free higher education, are progressing policy towards major reform of their universities and introducing substantial university fees. It is time that Ireland took note of the changing international climate. Chancellor Gerhard Schrőder took the initiative when the poor international ranking of Germany’s universities was revealed. He moved decisively to introduce fees and to establish a number of elite universities with the autonomy and resources capable of providing Germany with the knowledge-age leadership it requires to compete.
French president Nicolas Sarkozy has seen reform of the French universities as a key target for the reinvigoration of France and restoration of competitiveness. Sarkozy and the new leadership recognise that the French higher educational system is crumbling and the abolition of fees has been a root cause. He intends to allow universities more autonomy and move towards charging substantial tuition fees.
The Irish electorate expects decisive and strong leadership in difficult times. Minister O’Keeffe has shown courage in raising the fees issue. If he moves forward with determination to structure the financing of higher education in Ireland along New Zealand or Australian lines he will have made a profound contribution to Ireland’s future competitiveness and wellbeing.
Dr Edward Walsh is the founding president of the University of Limerick
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 Gruber, Josef. Effect of the introduction of a income-contingent student loan system on the participation rate of tertiary education. Johannes Kepler University, Lintz, Austria. 2006.