Varadkar takes UK-style loans for student fees off the table
Taoiseach Leo Varadkar shot down a British or US-style student loan scheme that would leave graduates being "saddled with enormous debts".
The future funding of the university system is under scrutiny with the Cassells Report putting student loans forward as an option of boosting cash-flow.
But there remains a lack of clarity on how the soaring cost of third-level education will be funded, with universities calling for an extra €350m next year.
Mr Varadkar last night gave his strongest signal yet that his Fine Gael-led Government will not be in favour of heaping large debts on students.
He nonetheless left the door open to some form of student loan, saying that students "should make a contribution" to the cost of education.
But he warned young graduates have enough financial difficulties trying to buy or rent homes without the added burden of big loan repayments.
While sources said he was "sending out a signal", they insisted he was not seeking to pre-empt an Oireachtas committee review of the Cassells Report.
The Taoiseach delivered his comments last night while addressing a symposium at Trinity College Dublin, which marked the 425th anniversary of the college.
He said: "I certainly could not stand over an outcome that left Irish students graduating with the kind of debts that American or English students do.
"It is difficult enough for young people these days to buy their first homes and pay the rent without being saddled with enormous debts in their 20s and 30s in a way that is the case in England and the United States."
Education Minister Richard Bruton has referred the Cassells Report to the Oireachtas Education Committee to seek political consensus and its recommendations are awaited.
The Labour Party is opposed to a loans scheme and Fianna Fáil, as yet, has shown little appetite publicly for one.
An income-contingent loan system put forward in the Cassells Report differs from what applies in the US.
The US has a mortgage type system, where graduates are obliged to repay regardless of their financial circumstances - which can result in steep debts.
Mr Varadkar did make reference to some contribution from students in funding their third-level education.
"From my own point of view, I think it is appropriate that students, as they do now, should make a contribution to the cost of the course that they study, from which they will derive so much benefit," he said.
However, universities say they need an extra €129m next year to meet day-to-day running costs and €220m for building works. The Irish Universities' Association has sent a pre-Budget warning to the Government that its ambitions for the higher education system cannot be achieved without adequate funding.