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Dublin: 2 °C Monday 16 December, 2019

Opinion: Third level tuition fees should be reintroduced – here's why

The reintroduction of undergraduate tuition fees – and a more generous and equitable system of grants – may be the only sustainable funding model for Irish third level education.

Sean Byrne Economist

THE DECLINE OF Irish universities in the latest international league tables is hardly surprising given the decline in funding of third level education over the past six years.

Between 2008 and 2014, spending on third level education has fallen by 32% resulting in a rise in staff student ratios from 1:16 to 1:20. The decline in staff student ratios is even worse than the figures suggest, as many undergraduate courses are now taught by poorly paid postgraduate students. With the exception of the building of a new DIT campus in Grangegorman, there has been very little capital spending on third level education since 2008 and 40 per cent of the physical infrastructure is now below standard according to the HEA.

The decline in funding per student results from a combination of reduced government spending and increasing student numbers. Ireland now has one of the highest participation rates in third level education in the OECD. If this participation rate is maintained, the number of students in higher education will rise by 20% over the next decade. Unless funding is increased, there will be an inevitable decline in standards. Already many third level students who have difficulty engaging in self directed learning, require high levels of tuition if they are to be educated to a credible standard.

Increasing private contributions while maintaining public funding

Only 20% of the income of third level colleges comes from student fees. This is lower than in most OECD countries, other than Scandinavia, where third level education is almost wholly publicly funded. At a conference hosted by the Irish Universities Association recently, Art Hauptmann a US education policy adviser stated that public funding could sustain a participation rate of 30 to 40% but not a rate of 60%. Hauptmann argued that the solution to the funding crisis is to increase the private contribution to funding while maintaining the public contribution. He considered that this could be done without imposing an intolerable burden on students and their parents.

Before stepping down as Minister for Education, Ruairi Quinn set up a working group to examine the funding of third level education. The group will consider whether increased contributions from students should be through the re-introduction of tuition fees, a state supported loan scheme, or some combination of both.

A report on the operation of the third level grants system was commissioned by, Niamh Bhreathnach when she was Labour Minister for Education in the Fine Gael Labour Government of 1992 to 1997. The 1993 report by Donal de Buitleir showed that the grants system favoured farmers and the self-employed over PAYE workers, whose income was easily determined, while the income of farmers and the self-employed could be reduced by the offset of losses or declining agricultural prices and took no account of wealth.

To solve this problem, de Butileir recommended including assets in the means test. This proposal was vetoed by Fine Gael. The report also showed that many high income parents were covenanting income equivalent to fees to their children and thus lowering their income tax payments.

A questionable justification for abolishing tuition fees

Niamh Bhreathnach responded by abolishing undergraduate tuition fees, arguing that this would increase participation in third level by students from low-income families. This was a questionable justification for abolishing tuition fees, as students from low-income families who secured a grant had their fees paid. The problem with the grants system was that for PAYE workers, the cut-off income for a grant was too low.

Participation by students from low income families did increase somewhat, but remains low, while participation of students from well-off families is now among the highest in the OECD.

Ruairi Quinn resurrected the proposal that assets should be included in the means test for grants, but as a result of vehement resistance from farmers’ organisations and Fine Gael TDs this proposal seems to have been abandoned. In his recently published account of his experience as an adviser to Ruairi Quinn, An Education, former Irish Independent education correspondent John Walsh reveals that Enda Kenny, through his “chief of staff” Mark Kennelly, vetoed the inclusion of assets in the means test for third level grants.

Too much government leverage over third level institutions

As the State will not be able to completely fund third level education, even when the public finances improve, the re-introduction of undergraduate tuition fees must be seriously considered by the working group examining the funding of higher education. Complete funding of third level educations by government, even if it could be afforded, would not be desirable as it would give government too much leverage over third level institutions.

The parents of many third level students can afford to pay fees and ought, on equity grounds, to be required to do so. The parents of students who attend fee-paying second level schools pay up to €10,000 per year in fees yet when those students enter higher education, as almost all of them do, they are required to pay only a registration fee of €2,700. The abolition of third level tuition fees resulted in many parents who would have saved to pay for their children’s third level education, using the money instead to send them to fee-paying second level schools.

The lifetime return for acquiring a third level qualification in Ireland is €350,00 which is the highest in the OECD, largely because of the lower cost of providing third level education in Ireland and lower graduate unemployment. That this increase in the lifetime earnings of third level graduates be funded by taxpayers, with minimal contribution from the parents of well-off graduates, is clearly inequitable.

Recruitment of overseas students nudge Irish students out of the running for sought-after courses 

In the absence of undergraduate tuition fees for Irish students, third level colleges must seek to recruit overseas students who pay high fees to earn revenue. This problem is particularly acute in medicine, where many overseas students are recruited, resulting in a reduction in the number of places available for Irish students.

A system of state subsidised loans for third level students is also being considered by the working group, but they should bear in mind that the level of arrears on such loans in the USA, has raised fears that the scale of default could be as great as that on sub-prime mortgages.

The reintroduction of undergraduate tuition fees – and a more generous and equitable system of grants – may be the only sustainable funding model for Irish third level education.

Sean Byrne is a lecturer of Economics at DIT.

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Sean Byrne  / Economist

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