Dr. Aed?n Doris:

I thank committee members for inviting me. A wide range of issues pertaining to the future funding of higher education are being considered by the committee at today’s meeting. My research expertise is relevant to two of these. I have done research on income-contingent student loans and how they might contribute to higher education funding. My research in this area was incorporated into the 2016 Cassells report. I have been involved in research and policy reports on access to higher education. My comments will address funding and access issues in the context of my work in these areas.

The Cassells report concluded that the 2016 level of higher education funding was unsustainable and called for increased core funding of €600 million per year, rising to €1 billion per year by 2030. Although funding has increased in recent budgets, so have student numbers, meaning that spending per student has not improved. Reports suggest that the European Commission’s analysis of the Cassells review, which remains unpublished, indicates that between €350 million and €400 million in additional core funding is needed annually, a lower figure than the €600 million indicated in the Cassells report, but nevertheless substantial.

The Cassells report, to which I contributed, outlined three possible options for increased funding, namely, a model of full State funding; increased State funding with a continuation of upfront student fees; and increased State funding combined with an income-contingent loan, ICL, system. I will briefly outline the economic view of these alternatives.

Although a fully taxpayer-funded system may seem attractive because it provides access to education at no upfront cost to the student, it is ultimately the most regressive option as it entails the biggest transfer of resources from those who have not benefited from a higher education, the lower paid, to those who have, the better paid. Moreover, this option would entail a continued heavy reliance on tax revenue for any future investment in the sector.

Option 2, combining increased State support with upfront fees, as at present, alleviates some of the public cost in the short- and long-term. However, upfront costs raise concerns about affordability and accessibility. Although about half of higher education students do not pay fees because they are covered by a fees grant, some of those who do not qualify have incomes close to the qualification threshold and struggle with both fee and maintenance costs. This is particularly true for families with more than one student in higher education at a time. Many parents borrow at commercial rates to cover these upfront costs.

The purpose of an ICL system is to remove such concerns while also sharing the burden of financing higher education in an efficient and equitable manner. ICL repayments, which are automatically deducted from the graduate’s pay cheque on the basis of monthly earnings, are low or zero for low earners and increase as earnings increase, so they are designed to be affordable. Income-contingent debt is, therefore, unlike other forms of debt.

Although ICLs would eliminate fee-related upfront costs completely, it is my understanding that these have been ruled out by the Minister. Reports indicate that a reduction in the €3,000 student fee and possibly its eventual elimination has been proposed instead. Option 1, therefore, appears to be the preferred one. As mentioned, this is a regressive proposal and implies even greater Exchequer funding into the future. Perhaps this reported decision is based on the analysis included in the European Commission’s economic analysis of the Cassells report proposals. I look forward to publication of that.

I worked with Dr. Delma Byrne and other Maynooth colleagues on a 2014 evaluation of the higher education access route, HEAR, and disability access route, DARE. This evaluation drew attention to the possibility, suggested by the data, that within the pool of low-income higher education applicants, successful HEAR applicants may be drawn from the relatively more educationally advantaged of that pool. As a result of some of the insights from this report, HEAR and DARE eligibility criteria were revised.

More recently, I was a member of an Irish University Association HEAR review group. It has proposed amendments to the HEAR criteria, which are being considered. Through my work on this group, I have become very aware of the practical administrative difficulties in identifying those most in need of targeted assistance.

There is more to access than attaining a place in higher education. It is also important that disadvantaged students complete their degrees and achieve the grades they are capable of, given that there is substantial evidence that degree grade affects future earning potential. In this respect, I believe it is important to consider the role of maintenance grants in ensuring true access. In recent years, these grants have fallen substantially in real terms when taking into account increases in living costs for students. In addition, family income thresholds for grant eligibility have fallen in real terms. Both of these facts have contributed to rising upfront costs for students and their parents, even those who qualify for both fee and maintenance grants.

My experience as a lecturer tells me that this is resulting in an increasing number of students who are working substantial hours in the labour market and fitting their studies around their work, rather than vice versa. This may have been exacerbated by the Covid pandemic.

Although it is difficult to find data on hours of work of students, and especially on how work affects retention and grades in education, I regard the adequacy of maintenance grants as an important aspect of true higher education access. I note that modest grant increases and eligibility threshold increases have been announced by the Minister recently and that a more extensive review of the grant system is under way. This is indeed to be welcomed.