TCD Negotiates Student Loan Scheme as Govt Explores PPPs

Student loan schemes are now being seriously considered at various levels of Irish higher education

Rónán Burtenshaw


Advanced negotiations have taken place in Trinity College, Dublin, involving Bank of Ireland and the Students’ Union, about pioneering a student loan scheme. Trinity News also understands that the government is exploring the use of Public-Private Partnerships (PPPs) with banks to provide loan schemes for students in higher education.

Discussions in Trinity College began just before Christmas, at the initiation of the College’s Treasurer Ian Mathews. The proposed scheme is meant to fill the gap between students currently eligible for grants and those who  are struggling to afford the Student Contribution, which currently stands at €2,250 but will rise to €3,000 by 2015.

The programme intends to pilot with a group of around 300 students and will require parents to guarantee repayments, which will initially be in the region of €50 per month and won’t affect the principle sum. The loans are expected to be repaid in the short-term, with negotiations focused on a period of three to five years after the end of the degree – although this has yet to be finalised.

It had been proposed that certain courses would be excluded from the scheme, but this option has now been ruled out. Loan schemes already exist in the college for courses in Medicine and Dentistry but the proposed agreement would be broader in nature.

The parties involved in the discussions had provisionally set the date of June 26th for the announcement and intended to examine the possibility of linking the loans’ repayments to future income. During the discussions Bank of Ireland said that it did not expect for the initial loan arrangement to be lucrative and that their incentive for entering the deal was to get students banking with the company. It is unclear at this stage what the proposed interest rate on the loans would be.

Government Researching Partnership for Loans

Trinity College’s programme might only be the first in a broader movement towards student loans at third-level. In a related development Labour Party sources have told Trinity News that the government is pursuing research into student loan schemes, with a view to establishing a Public-Private Partnership (PPP) with an Irish bank. “A dialogue was opened with AIB at the time of the last Budget, when the postgraduate grants were abolished,” a source said, “but there have also been conversations about student loan schemes that include undergraduates.”

Any national agreement involving the government would likely involve a guarantee. This is seen as highly unlikely in the short-term, due to hostility to the idea from the EU-ECB-IMF ‘Troika’.

It is in this context that pilot schemes like those in Trinity could be useful in rolling out infrastructure or as test cases. The Student Universal Support Ireland (SUSI), a new national grant-awarding authority established in the wake of the 2011 Student Support Act and found online at, is also seen as a body that could facilitate any future national loan scheme.

Sources indicate that the research into PPPs is looking at ways to condition repayments on future income and facilitate special deals or exceptions for public professions – such as teachers, nurses and Gardaí.

In August of 2011 Minister Quinn ruled out a student loan scheme. He did, however, acknowledge that it was “hard to see” how higher education could meet its targets without new sources of funding.

Fine Gael passed a motion in support of student loans at their recent Ard Fheis in March, while a motion at the Labour conference about the reintroduction of fees was referred back to committee.

Student Movement Responds

Speaking to Trinity News USI President Gary Redmond confirmed that negotiations had taken place “twice, maybe three times” around the issue of a postgraduate loan scheme, in which the government indicated that it was pursuing the possibility with a NAMA-linked bank. He said that he “hadn’t had any conversations” on the matter since January and had been told that the government was not in a position to act as guarantor.

Mr. Redmond denied that he was aware of any intention on the government’s part to pursue a broader student loan scheme. “Our discussions with the government focused on postgraduate loans, something USI policy supports. For undergraduates we are still guided by the ‘free fees’ policy and have had no discussions.”

Asked if he would support student loan schemes Mr. Redmond said that he was supportive of ‘use now, pay later’ schemes but had “made clear” that his own preference was for a graduate tax. He wouldn’t comment on the broader implications of Trinity’s proposed loan scheme, saying “what member unions do in that regard is up to themselves”.

TCDSU say that they have “been in conversation with the College and the Bank of Ireland” to try to find an arrangement “that might help students to pay the Student Contribution”. However, they say, the plans are still in the “negotiation stage” and “no details have been finalised” as of yet.

Trinity College’s Communications Office said that the College were “especially sympathetic to students and their families in relation to the  overall cost of  a  university education”. They said that they had an “ongoing dialogue” with Bank of Ireland in which “options are regularly explored that may be best suited to the needs of our students.”

UPDATE (14:00): The Department of Education and Skills have responded to yesterday’s story, saying that they are “involved on an ongoing basis in exploring a range of possibilities for the provision of supports to assist students.”