THE biggest university in the country is hiring a debt collection agency to pursue students over outstanding fees.
The move by University College Dublin (UCD) follows in the footsteps of the University of Limerick (UL), which, the Irish Independent has learned, is already using an agency to collect money.
It comes as universities find their finances coming under increasing pressure because of cuts in state funding and the growth in numbers enrolling at third level.
They have repeatedly called for higher contributions from students – who will be paying a fee of €2,500 from September, in what is known as a student contribution charge.
Now UL has hired a debt collection agency, which is already contacting former students who still owe fees.
And UCD has posted an EU tender notice saying it is "seeking expressions of interest from interested parties to provide professional services relating to collection of outstanding monies within UCD".
The minimum value of the contracts to be awarded is in excess of €200,000 annually.
The deadline for prospective companies interested in taking over UCD's debt collection is February 26.
"The university is not in a position to disclose the average amount owed by way of student fees/charges," a UCD spokesperson said.
The majority of former UL students who have received correspondence from the debt collection agency did not complete their courses and left without a degree.
However, some graduates have left UL with outstanding debts.
It is believed that some of the graduates' unpaid fees date to 2011.
A spokesperson for UL confirmed to the Irish Independent that the use of the debt collectors was "a last resort".
UL has refused to say how much is owed by former students and graduates, but it is understood to be less than €2,000 in the vast majority of cases.
However, when put together, the outstanding debts are regarded to be so significant that UL has contracted a debt collection agency to recoup the fees.
Those who passed exams in their final year and left UL with unpaid fees have not received their results transcripts which may be sought by prospective employers.
UL said, as a public body, they have a duty to seek to recover outstanding debts.
"UL seeks to accommodate students and their parents by offering a range of flexible payment methods for student fees," the spokesperson said.
The Irish Independent contacted all seven Irish universities and colleges querying whether they used debt collection agencies to collect unpaid student fees.
UCC and NUI Maynooth did not issue any reply regarding debt collectors.
Trinity College Dublin and NUI Galway said they do not use debt collection agencies and neither have taken any legal action regarding unpaid fees.
NUI Galway said they are sympathetic to cases of real hardship and operate a financial aid fund for students.
Dublin City University (DCU) said they engage directly with students to recoup outstanding amounts owed.
"The relative success of current debt recoupment measures has obviated the need to progress to formal legal action but DCU reserves the right to do so," a spokesperson said.
Annual contribution fees for third level students will rise from a 2011/2012 level of €2,000 to €3,000 by 2015.
Colleges that allow students to pay their contribution in two halves may be more vulnerable to non-payment than those where the full student charge is demanded at the start of the academic year.
The increase of €250 in the registration fee for the four years is expected to bring in an additional €20m annually.
In 2010, the fee was €1,500. It was €190 when introduced in the mid 1990s.
Students are required to pay the annual charge to cover the cost of student services, registration and examinations.
As a result of public funding cutbacks over the last four years, the seven universities and colleges can no longer afford to write off bad debts as student enrollment numbers continue to increase.
In the last budget, third-level colleges were told to take €25m from their own reserves to replace a gap in state funding this year.
It is estimated that 9pc, or 1,800, of first-year students attending the country's seven universities and colleges do not progress into the second year each year.
The dropout rate in computer related courses is understood to be far higher than in teacher training courses.