Thomas Pringle (Donegal, Independent)
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37. To ask the Minister for Education and Skills his plans to introduce income contingent student loans as part of the future funding model of the third level education sector despite the concerns raised in relation to the introduction of this type of funding model on access rates and problems associated with debt burden; and if he will make a statement on the matter. [16504/17]

Thomas Pringle (Donegal, Independent)
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This question is about the Cassells report and trying to see what the Department's view is on the potential for student contingent loans.

Richard Bruton (Dublin Bay North, Fine Gael)
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The Cassells report considers a number of potential funding options, including for deferred payment of student fees. It is currently being examined by the Oireachtas Joint Committee on Education and Skills with a view to making recommendations on a long-term sustainable funding model for higher education. This process includes receiving input from relevant stakeholders. It will be important to obtain political and societal consensus on achieving a sustainable funding model for the higher education sector in the future and my Department and I continue to work with the committee as it undertakes its deliberations.

In a follow-up to the expert group report, appropriate technical work will be undertaken by an inter-departmental group chaired by my Department on income contingent student loans in order to inform future funding policy options, including in light of recommendations from the Oireachtas Joint Committee on Education and Skills. In advance of these recommendations, however, I have taken immediate steps to increase funding for higher education, the first such increase in nine years. Increased Exchequer funding of €36.5 million was secured in this budget for the higher education sector. This includes an increase in funding available to students from disadvantaged backgrounds and other under-represented groups to assist them in overcoming financial barriers to accessing and completing higher education. Provision is also being made in the Department's expenditure ceiling in 2018 and 2019 for demographic increases which cumulatively represent an additional €160 million investment in the sector in the period 2017 to 2019.

In addition, the Department of Education and Skills and the Department of Public Expenditure and Reform are currently undertaking a public consultation process on a proposed Exchequer-employer investment mechanism for higher education and further education and training. It is estimated that the mechanism, which proposes an increase in the national training fund levy from 0.7% to 1% between 2018 and 2020, could yield close to an additional €200 million revenue in 2020. Comments on the proposal may be submitted to the Department by 5 p.m. on Thursday, 13 April. Full details of the consultation process are available on the websites of both Departments. The intention is that, taken together, these approaches will contribute to and inform the development of a long-term sustainable funding model for the higher education and further education and training sectors.

Thomas Pringle (Donegal, Independent)
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I thank the Minister for his response. It seems from his response that the Department is going ahead and doing much work on how student income contingency loans would work in practice alongside the work the Oireachtas committee is doing. The Department has not actually contributed to the work the committee is doing at the moment. It has not given evidence there. Why is the Minister developing the system parallel to the work the committee is doing if the committee might recommend that there should not be income contingency loans? Is it a case that it is actually a fait accompliand the decision has been already taken within the Department?

Richard Bruton (Dublin Bay North, Fine Gael)
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No decision has been taken. We should prepare if it is intended to make a move. Part of the Cassells report is that, over the last number of years, the higher education sector grew by something like 25% with no increased State funding. The report is anticipating another 25% growth and recognises that doing nothing about this is not satisfactory. It outlines three sources of potential funding. One is the Exchequer, which we are pursuing. The second is employers, which we are pursuing. The third is the possibility of this student contribution mechanism. It would be imprudent of us not to look at the technical side of that, should it be decided by the Oireachtas that this is the direction we want to go. It is prudent to do that preparation.

This is something the Oireachtas has to look at as a group, just like we are looking at health funding and pension funding in the long term. The Cassells report has set out issues that should be looked at, such as the extra earnings that someone who graduates gets, and whether it is fair to ask such a person to make a contribution back. We also have to look at access for students who do not come from backgrounds or families who can afford it. Would they be put off or could their needs be dealt with by other mechanisms? Might collection problems arise? All these are issues that we need to assess. That is why the Oireachtas is taking its time. We are available at any time to answer questions on any issues the committee wishes to raise.

Thomas Pringle (Donegal, Independent)
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I take it from the Minister's response that options one and two are being pursued but he failed to say whether he was pursuing option three, the income contingent loans. I take it from his response that the Department is pursuing the income contingency loans. That is regrettable and should not be done because it places a huge burden on students and does not contribute anything to accessibility or affordability for students. There is ample evidence from across the world that most student debt is made of interest charges that accrue at a later stage through the income contingency loans. The Union of Students in Ireland is implacably opposed to it. Many of the Members of the House are opposed to it. I am seriously worried that the Minister is pursuing option three in parallel with options one and two and is going to try to develop some sort of hybrid of all three as a way of lessening the burden. That is not acceptable.

Thomas Byrne (Meath East, Fianna Fail)
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The Minister has announced today that a technical study is being carried out. That has come as news to me, as a member of the Joint Committee on Education and Skills. We had decided to do a technical study because Peter Cassells recommended it . This is a new departure from the Minister. The best thing to do is that the Department fund an expert who joint committee would then hire through public tender who would then carry out a technical study. That would be the best and most independent way of doing it. We need resources to do that. I agree that it should be done fairly. It is shocking that the Minister would announce that this is going ahead given that all previous replies were that every issue relating to the Cassells report was being referred to the Oireachtas committee.

Richard Bruton (Dublin Bay North, Fine Gael)
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We are working on every issue that has been raised. We are looking at the employer mechanism, which obviously can be assessed by the committee, and the Exchequer mechanism. I am not sitting on my hands and waiting for the assessment work to be carried out. I am moving immediately because there is a crisis, and I am acting to deliver cash straight away, to put an employer's mechanism in place which hopefully will be agreed in the budget, and I am making contingency preparations with the Department of Public Expenditure and Reform should it be decided that this is the route to go. I can assure the House that the budget is not exhaustive. We are looking at issues such as cashflow impact, which is the sort of thing that clearly is an issue if this is to be a workable operation. That is wise planning, but we are not making any assumptions about what the Oireachtas committee might recommend to us.