Dr. Aed?n Doris:

I understand Deputy Ó Cathasaigh's concern about the debt associated with income-contingent loans being daunting. We probably should not call it debt, because it is not debt in any kind of normal sense. You only repay it if you have the wherewithal to repay it. In every income-contingent loan system in the world, there are people who do not fully repay their debt and some people who do not repay any of their debt because they have fallen on unfortunate circumstances, for example, they are unemployed or they have a disabled child they need to take care of. All of those things are taken into account. All the evidence is that what affects people's decision to participate in higher education are upfront costs.

At the moment, people are incurring debt to go to higher education. However, it is not an income-contingent debt. Their parents are basically taking out the loans. They are taking them out at commercial rates, especially if they have more than one kid in college at the same time. We are talking about really substantial repayments that have no income-contingent element to them.

The Deputy asked about international evidence and the case we always look at when we look at income-contingent loans is the UK, which is the country closest to us that have them. It is also the country that makes the biggest mess of them. The problem with the UK is not that the loans are income contingent; it is the fees are so high. Because the fees are so high, the loans amount to a graduate tax. Most people will be repaying them for their whole working lives, because they accumulate so much debt over their working lives. They charge extremely high fees. They increased fees from £3,000 to £6,000; I think was the first jump they made, although I could be wrong about that. They made substantial jumps to get up to £9,000 from the initial £3,000. Yet, there was no change in access by the lower socioeconomic classes that people had been worried about. The reason for that was that people understood that the fees would be repaid in the future and they are not upfront costs. As well as this, they would only be repaid if they could afford to repay them. Therefore, a striking aspect of the research on this is that it did not put people off going to college.

A more reasonable income-contingent loan system is in Australia. It was the first one and it has been ongoing for years. There has been much research on access there and it has had no impact. Fluctuations in the fees have had no impact on access by lower socioeconomic class students. There is therefore much evidence that income-contingent loans do not affect access negatively, whereas upfront costs do. The situation we have at the moment is that we have a lot of upfront costs. We have the €3,000 fee for approximately half of the student population. We have the costs of attendance, which are inadequately covered by the SUSI grant and which need to be topped up. That seems to me to be worse than the income-contingent alternative.