News Education

Sunday 22 January 2017

Funding dilemma for next government as student loans proposed

John Walshe

Published 25/01/2016 | 02:30

Jan O'Sullivan, the Minister for Education & Skills
Jan O'Sullivan, the Minister for Education & Skills

Two reports will consume a lot of the time and energies of the next coalition's Minister for Education. One dealing with the future funding of higher education is still being finalised and may not see the light of day until after the election while the other outlining a new National Skills Strategy will be launched next Wednesday.

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Both are really important in a country obsessed with higher education. They will address basic questions such as what percentage of young people should go to college, can we get a really well developed alternative further education and training system and, most important, how do we fund it all.

A coherent skills strategy is key to sustained economic recovery. But it can't be implemented on the cheap, especially when other countries are ramping up investment to compete for foreign direct investment which in turn means more jobs. The new minister will have the unenviable task of bringing a memo to Cabinet outlining how the system can grow and how it can be funded. Whatever she or he proposes will be costly and controversial.

Let's take higher education first. In the words of Peter Cassells, chair of the Expert Group on Future Funding of Higher Education, the status quo is not sustainable. His report will look at various options such as a loans' scheme, more support from employers and from philanthropy and greater state investment - ie taxpayers' money. There is backing for a loans' scheme among members of the Expert Group but not all are convinced that it is a sustainable model. It would mean students repaying loans when they graduate and start earning a certain level of income. But many questions remain such as the interest rate, the length of payback time, when is it written off, what happens when you emigrate, etc. These would all have to be teased through before the new Minister for Finance would sign off on it and be assured it's within EU fiscal rules.

The Cassells group has put a cost tag of more than €1bn on the expansion expected in higher education numbers caused by the bulge working its way through our schools at present. Last year some 48,000 applicants accepted CAO offers of places, up 10,000 in a decade. The Cassells group says that on present trends the number of college places will have to increase by up to 29pc if we are to maintain our present transfer rate from school to college.

The next government will try to siphon some of that demand into the further education and training sector, not necessarily because it's cheaper but because we need a wide range of skills into the future. As Minister Jan O'Sullivan said during the week too many young people feel under pressure to go to college and the system has developed to suggest that college is the only option for a successful life.

Additional apprenticeships and traineeships are being developed away from the construction sector in the expectation that they will be an attractive option for many young people. But that will also cost money and employers will be expected to make a significant contribution.

Money will also be needed for upgrading many of the existing further education colleges. The Blackrock Further Education Institute in Dublin is housed in a magnificent restored building but not all further education colleges are and they need better facilities if they are to be seen as on a par with third level colleges.

The problem facing the new minister is stark - how to fund further education at a time when rising rolls in primary and second level schools mean that money also has to be found for hundreds of additional teachers and buildings at those levels. Difficult choices ahead.

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