Ciarán Cannon (Galway East, Fine Gael) | Oireachtas source

The current variable interest rate of 10.8% APR is below the existing standard unsecured personal loan rates, which are 14.8% APR for a loan of less than €5,000 and also below the existing standard student loan rate of 11.9% APR. If, as the Deputy has said, credit unions are offering rates substantially lower than the 10.8% offered by Bank of Ireland, I am sure postgraduate students are more than capable of making the right decision in choosing the financial institution to support them in their postgraduate education.

There is considerable flexibility in this loan that would not be available under normal circumstances. The schedule provides for a significant period of interest-only payments and as the loan has a variable as opposed to a fixed-interest rate, the student can pay off the balance of the loan early without incurring any fees or charges. This loan initiative developed in conjunction with the NTMA will ensure in these very difficult times that postgraduate students will be able to access funding to pursue their studies.

This is a challenging time. The Minister, Deputy Quinn, had to make some very difficult decisions on whom we would support with the very limited resources available to the Department of Education and Skills. The challenge, as the Deputy is well aware, is that 70,000 new students are about to enter the educational system and this will require significant investment in infrastructure. In making these difficult decisions, the Minister, Deputy Quinn, engaged with the NTMA and a number of different lending institutions to secure the best possible deal at this time for students who wish to access finance for their postgraduate studies.

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