Can you afford an extra €8,000 a year? Or, do free fees support the wealthy.
The Minister’s recent announcement that the reintroduction of tuition fees would raise €530m sounded very impressive indeed. The minister was forced into an embarrassing u-turn the next day, admitting that far from raising €530m, his new model would raise only around €35m, this would then be subject to 40% tax relief, so in the end, would be much closer to €20m.
This put an end to the Minister’s plans to charge just the “super-rich”. The only way he can raise enough money through fees is to charge each and every student up to €8,000 per year, a move supported by the university presidents. Can you afford €8,000 per year on top of the current costs? So let’s examine the facts. Since the abolition of tuition fees, we have seen the greatest expansion of higher education in Irish history, as seen in the latest HEA access study, we now have a participation rate over 50% in higher education, something unthinkable before the abolition of tuition fees in the mid 1990s.
The goal is to see all parts of society represented in third-level in proportion to their presence in the general population. More than 10% of all first-time entrants are now classed as mature, for example. Though only a start, it is a promising trend, and similar trends have been noted for people from low-income backgrounds, people with disabilities and people from minority backgrounds. All independent studies have shown fees to have a negative effect on those under-represented groups. By deterring entrance to college in respect of people from middle and low income families, the progress that has been made over the last decade would be lost, our commitment to social justice would be in tatters and our economy may be damaged beyond repair.
Proponents of a fee-paying system argue that the public funding of tuition represents a transfer of wealth or a subsidy from the less well off to everyone else, because the financial returns of higher education accrue mainly to the individual.
This, however, is a fundamentally flawed argument, as it does not take into account Ireland’s progressive taxation system. Those who earn more pay more tax. Third level graduates pay up to 70% more in taxation over the course of their lifetime, and as such contribute significantly to the exchequer. Is it really the graduates’ fault if the government does not spend this money wisely?
The Australian model of student loans and increased taxation seems to be the model preferred by Minister O’Keeffe. However, what the minister will not tell us is the Australian model is under review by the Australian government because it currently does not work. The unpaid accumulated student debt in Australia stands at over 15 billion dollars. What the minister will also not tell us is that about 30 percent of all student loans remain unpaid in Australia, and so the state will have to pick up the tab. Wouldn’t it be better to just invest in higher education in the first instance? A system that increased the overall cost of college would encourage higher take-up of bank loans and credit cards. We know that as the costs of college increase, student debt and levels of hardship rise concomitantly.
The reintroduction of tuition fees would have the following consequences: higher drop-out rates, a dramatic decrease in the number of people from middle and lower income families going to college, a lifetime of debt for those already struggling to survive in such a high cost economy, an increase in the number of students having to work while at college as well as falling participation rates in clubs and societies at college.
If students are forced to work more hours while at college, all of the evidence shows that test scores will drop. Is that the way to increase our knowledge economy?
Shane Kelly is President of the Union of Students of Ireland.
It is now well over ten years ago since tuition fees for third level were abolished and replaced by what has been called the ‘free fees’ scheme. The underlying intention was that higher education should be seen as a basic entitlement and made available free at the point of use to all citizens. This would be funded by the state, with the taxpayer directly paying the fees for each student. And it was envisaged that participation in third level would increase significantly, and in particular amongst disadvantaged sections of society.
Perhaps the choice of the term ‘free fees’ for this was unfortunate, since nothing is ever free. What was in fact done was that the burden of paying the fees was transferred from the student to the taxpayer. As those people who were below a specific income threshold didn’t pay fees anyway prior to the free fees scheme, the net result was that the taxpayer took over responsibility for paying the fees of wealthier citizens. To underscore this point, no additional resources were allocated to the disadvantaged, and moreover part-time students (who disproportionately come from poorer backgrounds) got no support at all, not even free fees. In the meantime, the middle classes enjoyed their windfall by sending their children to private secondary schools, so that one of the main effects of free fees was to benefit private secondary education and asset strip good state-funded schools.
Whatever the motivation was of those who abolished fees, the reality was that it turned out to be a programme for supporting wealthier people at the expense of the disadvantaged: it was, in short, a redistribution of money from the poor to the rich.
But that was not the only problem. In the mid-1990s, when free fees were introduced, universities were told that public funds would support them by maintaining the fees at appropriate levels. This has not happened. Since the introduction of the scheme, the total taxpayer support per student at third level has, in real terms, almost halved. The reality is, therefore, that it is the universities and not the taxpayer that have had to carry the burden of free fees; money has been siphoned from the universities and handed to the country’s wealthier citizens.
The reality is that in a developed country that aims to be knowledge intensive, universities are very costly to run, because they need state-of-the-art buildings and infrastructure and world class staff. That is always going to be expensive, and probably beyond the capacity of the taxpayer to handle without significant tax increases. What we have now is a system that under-funds the universities, while disproportionately giving financial support to better-off people. That is quite simply unsustainable, and not even very laudable on ethical grounds. Universities have themselves had to raise private money to support disadvantaged students. But this needs to be properly funded by the state, which in turn cannot afford to do so because, under this scheme, it has to make large payments to the middle classes. The priorities are all wrong.
I am therefore in favour of the reintroduction of tuition fees. Indeed, I regard their reintroduction as inevitable. However, I am also of the view that we need to put in place a proper system to ensure that nobody, whatever their means, is prevented or discouraged from pursuing third level studies; in other words, we need to have an effective system in place that provides grants, scholarships and loans, so that there is nobody who cannot afford to go to university. This is not hard to achieve. Harvard University is probably, in terms of fees, the most expensive university in the world. But it has a higher proportion of disadvantaged students than any Irish university.
It is time for change.
Ferdinand von Prondzynski is President of DCU.