Posted tagged ‘Peter Cassells’

Irish higher education: the funding dilemma

July 11, 2016

As Irish readers will know, yesterday saw the publication of the report of the Expert Group on Future Funding of Higher Education (chaired by Peter Cassells), Investing in National Ambition: A Strategy for Funding Higher Education. Its recommendations had been well trailed in advance of publication, so while they merit discussion of course they are hardly new. Indeed they are not new in another sense: most of what is analysed in the report, and indeed of what is recommended, had been analysed and recommended 12 years earlier in the OECD report, Review of Higher Education in Ireland. Very similar conclusions were reached back then, particularly in chapter 10 of that report.

The problem requiring a solution is not hard to state, and has been a matter of pretty solid consensus for well over a decade: Irish universities and colleges are seriously under-funded. The consequences include an increasingly unacceptable student-staff ratio, degraded facilities, high levels of student attrition, an erosion of international competitiveness. The solution is very easy to state also: more money. The conundrum for politicians is who should pay for this, or where this money is going to come from.

The Cassells expert group has identified three possibilities: (i) let the state pay for everything, but more generously than at present; (ii) maintain the current system of a €3,000 student contribution with additional state funding to make up the required amount; or (iii) an income-contingent loan system, under which higher education is free at the point of entry but where students contribute through re-payment of a loan once their income has reached a certain threshold after graduation. The report assesses these options, sets out the advantages and disadvantages of each, and in effect settles for option (iii), though not explicitly.

In the end this will not turn out to be a matter of choosing the best option, but of securing a policy that will not be damaging to anyone politically. The fate of Nick Clegg’s Liberal Democrats in the UK – who promised not to allow any increase in tuition fees but who were then in the government that did just that and ended up losing seats at the subsequent election – will be on everyone’s mind. If this is a problem that can be dodged it probably will be. After all, the OECD report has gathered dust for 12 years.

I confess I am hugely sceptical about an income-contingent loan scheme. Australia is held up as an example to follow, but the critical thing to note about the Australian model is that it has led to massive unpaid debts, estimated to lie at around or above a staggering AUS$40 billion. As the scheme also involves subsidised interest rates for the loans, it has been estimated that the cost to the taxpayer could be about the same as state funding for the system, but less predictable in its impact.

If it is our intention, as it should be, to ensure that access to higher education is unimpeded for those with the necessary talent, whatever their socio-economic background, then there are really only two options. One is full state funding: but this is meaningful only if that funding is generous enough to secure excellence, quality and international competitiveness. This in turn is unachievable unless taxes are raised to secure the necessary funds, and the revenues are hypothecated – i.e. ring fenced for expenditure on higher education only (which is not possible under current budget systems).

The other option is to have tuition fees for those who (subject to means testing) can afford it, free tuition for those who cannot, and perhaps loans-assisted fee payments for middle income groups.

There is no other realistic option that will actually work in practice and in the long run. There isn’t an easy silver bullet that requires no difficult decision by politicians. And because this is so, this report too may start gathering dust. I would love to think that I am wrong however, and that at least some steps will be taken to ensure that the erosion of excellence in Irish higher education is halted.