Mary Coughlan (Donegal South West, Fianna Fail)

The allocation for student grants in 2011 is just over €385 million. This is an increase of some 5% or €18 million over the 2010 provision. Increases in the number of students qualifying for grants, increases in proportions now qualifying for higher rates of grants as well as the introduction of the student contribution paid on behalf of grant-holders each account for additional cost pressures in 2011. In order to manage these cost pressures, a number of savings measures are necessary in 2011. The measures announced will deliver overall savings of some €22 million, which has been taken into account in the 2011 provision.

A 4% reduction across the board in the rates of student grant is to be implemented for all grant-holders from January 2011. This is in line with reductions in other income maintenance payments, including those for the unemployed, and will yield an estimated saving of some €8 million. The qualifying distance criterion for entitlement to the higher non-adjacent rate of grant is to be extended from 24 km to 45 km. The existing distance has been in place since the grant schemes were introduced in 1968. Vastly improved transport facilities and road networks and better and more cost effective travelling options have altered commuting practice more generally in society over that time. Statistics indicate that some 45% of all full-time students now choose to live in their own or their parents' home during term time, yet some 77% of grant holders are currently on the higher non-adjacent rate.

The new measure will come into effect from September 2011 and will affect an estimated 18,000 students. A savings yield of some €10 million is estimated in 2011, will a full-year saving of some €30 million. The automatic eligibility of mature students for the higher non-adjacent rate of grant is to be removed from the start of the 2011/12 academic year. Mature students who reside 45 km or more from their higher education institution will continue to be eligible for the higher non-adjacent rate of grant. It is estimated that some 6,900 mature students will be impacted by this measure. The estimated projected saving is €4 million in 2011, with a full year saving of some €13 million.

While the measures outlined will result in changes to the rate of grant payable, none of the measures will result in a student losing a grant or becoming ineligible for a grant. In fact, as a result of the introduction of an additional category of eligibility for support – permitting students to qualify for 50% student contribution' – approximately 2,000 families will benefit under this revised arrangement. This progressive measure will mean that where family income is marginally in excess of the current eligibility levels for maintenance grant support, only 50% of the student contribution or €1,000, will have to be paid, rather than the €1,500 student service charge a student may be liable for under the current arrangements.

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